On November 3, US artificial intelligence data analytics firm Palantir (PLTR) saw its shares fall more than 5% at the US market open, even though the company's third-quarter revenue and profit both beat expectations and it raised its full-year guidance, as the growth rate of total contract value (TCV) slowed markedly, triggering investor concerns about the sustainability of future revenue growth.
As of 10:54 PM Beijing time on November 3, Palantir shares were down 5.02% at $169.40.
In the third quarter, Palantir reported revenue growth of 96% year over year to $2.31 billion, with earnings per share of $0.44, both exceeding market expectations. Its US commercial business revenue rose 148% year over year to $984 million, up 29% quarter over quarter, surpassing its US government business revenue of $953 million for the first time.
The company expects fourth-quarter revenue of $2.649 billion to $2.653 billion and operating profit of $1.64 billion to $1.644 billion, also above market expectations. In addition, Palantir raised its full-year 2026 revenue guidance to $8.53 billion to $8.534 billion, implying full-year revenue growth of about 91%.
However, analysts noted that Palantir's total contract value growth slowed sharply to 6% year over year in the third quarter from 49% in the second quarter. Since this metric reflects the scale of newly signed contracts and potential future revenue, the marked slowdown undermined market confidence in the company's future growth.
At the same time, technology stocks have remained under pressure recently, with investors increasingly cautious about the sustainability of hefty capital spending on AI infrastructure and its returns. Although Palantir delivered strong financial results, weakening contract growth indicators, combined with an overall decline in risk appetite across the technology sector, continued to weigh on its share price.
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