Why Palantir Stock Is Sinking Today
Key Points
Palantir's share price is losing ground today despite no major business-specific news for the company.
Valuations for AI stocks have been under pressure recently following reports that OpenAI's performance has fallen short of expectations.
Palantir is gearing up for a big quarterly report on May 4.
Palantir (NASDAQ: PLTR) stock is moving lower in Wednesday's trading. The artificial intelligence (AI) and analytics software company's share price was down 2.8% as of 2:30 p.m. ET. Meanwhile, the S&P 500 and the Nasdaq Composite were each down 0.4%. Palantir stock had been off as much 4.6% earlier in the session.
While there doesn't appear to be any new business-specific news pushing Palantir's stock lower today, investors have been taking a more cautious approach to some AI stocks recently. Reports emerged recently that OpenAI's revenue and engagement metrics had been coming in below expectations, and the information has had ripple effects across tech-sector valuations.
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Palantir is losing ground as investors weigh AI risks
Excitement surrounding artificial intelligence technologies has played a huge role in pushing the broader market higher over the last year, and the tech category has a particularly pronounced bullish impact for some leading tech-sector players. While it seems clear that the disruptive impacts of AI are still just starting to unfold, questions about the monetization outlook remain. Some investors have also recently become increasingly concerned that new tech from rivals including Anthropic could curb Palantir's growth outlook.
What's next for Palantir?
Palantir is scheduled to publish its first-quarter results after the market closes on May 4. With the Q4 report that it published in February, Palantir said that it was guiding for sales to come in between $1.532 billion and $1.536 billion in this year's first quarter. Meanwhile, the company guided for adjusted operating income between $870 million and $874 million.
The company also laid out a target for full-year revenue to be between $7.182 billion and $7.198 billion. Revenues from U.S. commercial customers are projected to exceed $3.144 billion, suggesting an annual growth rate of at least 115%. Adjusted operating income for the year is projected to be between $4.126 billion and $4.124 billion, and the company also guided for adjusted free cash flow between $3.925 billion and $4.125 billion. Expectations are high heading into the quarterly report early next month, but Palantir has built an impressive track recorded of beating performance targets.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
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