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Palantir (PLTR) will report its financial results for the first quarter of 2025 on May 5.
Palantir shares are up 13% over the past five sessions. Investors may be running to shares because the stock has a history of pushing to the upside following quarterly reports. The AI stock, for example, rallied more than 20% on Q4 earnings in February.
While there’s reason to expect some upside to emerge in Palantir stock after its first-quarter update as well, investors should tread with caution still as that upside may prove temporary only.
Palantir Q1 Earnings Preview
Analysts expect Palantir to record $0.08 a share of earnings for its first quarter, which would translate to a 100% increase on a year-over-year basis. If PLTR beats estimates on May 5, investors will likely reward it generously in the succeeding sessions.
However, Palantir’s software is not cheap. So, the demand for it stands to take a hit now that President Donald Trump’s new trade policies are threatening to push the U.S. economy into a recession.
Fears of an economic slowdown could result in a disappointing guidance on May 5, which may overshadow the quarterly strength and trigger a decline in Palantir’s stock price next month.
PLTR Shares Are Overvalued
Caution is warranted in buying Palantir stock ahead of its Q1 earnings on May 5 also because the multiple tied to it is “very hard to justify,” according to Gregg Moskowitz, a Mizuho analyst.
PLTR shares are currently going for more than 180 times their estimated adjusted earnings for 2025. Even Nvidia (NVDA) is trading at only 25 times forward earnings at writing.
According to Moskowitz, much of the good news is already baked into Palantir stock now that it has rallied some 38% in the year to date.
His $89 price target on the AI stock signals potential downside of more than 10% from here.
Wall Street Rates Palantir at ‘Hold’
Other Wall Street analysts seem to agree with Moskowitz on Palantir stock.
According to Barchart, the consensus rating on PLTR shares currently sits at “Hold” with the mean target of $84 indicating potential downside of more than 15% from current levels.
