Palantir Just Beat Earnings and Dropped. This Has Happened Before. Here’s What Came Next

Shares of Palantir (NASDAQ:PLTR | PLTR Price Prediction) delivered some impressive quarterly earnings only to be met with a mildly negative reaction. Indeed, it was another tough crowd of Palantir shareholders. This beat-and-drop reaction has happened before and, if I were to place a bet, it’s probably going to happen again.

Given good results no longer mean a good reaction, perhaps it’s only natural to think about taking a few chips off the table, at least until Dr. Michael Burry, who maintains his bearish bets against the company, looks to cover and move on. After a disappointing move to an impressive quarter, though, the stock is becoming cheaper. Though a few percentage points off and a “free” wonderful quarter might not be enough to make it markedly less expensive. 

It’s like blowout quarters have nothing more to add to the bull case

Any way you look at it, Palantir now looks like a tougher name to own than the great Nvidia (NASDAQ:NVDA) and an easier name to bet against. However, like Nvidia, which experienced a sudden jolt of 5% on Wednesday’s trading session, Palantir stock might just give up at the worst possible moment. Timing is tough to do, especially when it comes to the free-falling names in a bear market that seemingly only know how to move lower over time.

In my view, I think Palantir is showing signs that it might just have what it takes to keep its growth going strong as AI looks to become exponentially more useful this year. If it’s not Palantir’s AI Platform (AIP) or Anthropic’s Claude Mythos, perhaps it’s something else. Either way, it’s becoming clearer that some of the most powerful, monetizable models might be behind closed doors in the earlier days of this AI revolution.

Unlike Anthropic, which has pulled ahead in the AI race but remains private (perhaps not for long, as investors look for an IPO worth just south of $1 trillion), Palantir stock is available for AI investors to buy. Of course, it’s tough to weigh whether the AI software firm is more of an AI-native disruptor or a software play that might get its lunch eaten by model makers at the frontier (Burry’s view is the latter).

Palantir continues to be on the right side of the boom

I’m inclined to view Palantir as more of a disruptor than a disruptee. Palantir’s main moat isn’t just a “wrapper,” but the infrastructure and value it builds on top. Can Anthropic or another firm do what Palantir does as well later on? Given how fast things are moving in the AI arms race, I suppose anything is possible.

But, for now, Palantir’s platform is trusted by governments, and until they move on to something else, I think any disruptive fears might be a tad overblown. After reporting a quarter that saw the business nearly double in size (revenues were up 85%), as Alex Karp put in his letter to shareholders, I think it’s hard to stand in front of the freight train with a bearish bet.

At the end of the day, Palantir isn’t just another SaaS company that’s scrambling to make a pivot; it was built from the ground up with AI in mind, and, as a result, the firm is already bearing significant fruit, delivering real profits in real-time.

For that reason, I’m inclined to view the firm as AI-native, capable of leading the way into AI-driven monetization. It’s creating serious value rather than what Karp referred to as “AI slop” software that “only appears to work.”

In any case, it’s clear that the so-called “no-slop zone,” where Palantir is operating, is where the money is at.

What’s up next for Palantir?

Moving ahead, the tug-of-war between bulls and bears is bound to get fiercer. With the bulls, like Argus Research, upgrading the stock after the first quarter, while others, like Jefferies, think the valuation could set the stage for a drop. If Palantir can’t rise after a sensational quarter in a market at fresh highs with tech in the driver’s seat, what can bring the stock back to life?

Though I have no idea what’s up next for Palantir after its sell-the-news kind of quarter, I do think it’s going to be harder to ignore the name if it keeps posting these kinds of surprisingly stellar quarters. Maybe it takes a back-to-back or another full year of perfection before shares can get going. In the meantime, though, I expect more near-term pain as explosive growth meets a sky-high valuation.