As of Monday Eastern Time, shares of artificial intelligence (AI) data analytics company Palantir Technologies (PLTR) fell slightly by 2.9% following the release of its third-quarter 2025 earnings report. Despite the report’s strong performance, with both revenue and profit exceeding Wall Street expectations, Q4 revenue guidance also surpassing market consensus, and management simultaneously raising full-year forecasts for several key metrics, the market reaction was relatively muted. The stock pullback may stem from two factors: firstly, Palantir’s valuation is already at elevated levels, and the positive expectations might have been largely priced in by the market beforehand; secondly, some investors are concerned about potential impacts on its business should the US government experience a prolonged shutdown.
Regarding specific financial metrics, Palantir’s adjusted earnings per share reached $0.17, and revenue achieved $1.09 billion, not only beating Wall Street expectations but also exceeding the company’s own prior guidance range of $1.083 billion to $1.087 billion. It is worth noting that the company does not issue profit guidance. This quarter, operating cash flow grew 20% year-over-year to $508 million, while adjusted free cash flow increased 24% to $540 million. As of the end of the quarter, the company held $6.4 billion in total cash, cash equivalents, and short-term investments, with no long-term debt.
In terms of business growth, adjusted operating income ranged from $695 million to $699 million, representing year-over-year growth of 87% to 88%. Particularly noteworthy was the performance of the US commercial sector. Leveraging its flagship AI platform (AIP), this sector saw revenue surge 121% year-over-year, a 29% increase quarter-over-quarter, reaching $397 million. Customer count skyrocketed 65%, driving the total contract value to a record $1.3 billion, a staggering increase of 342%. The foundation for future growth was also solidified, with remaining performance obligations growing 66% to $2.6 billion, indicating strong business backlog.
Palantir’s performance holds indicative significance for the entire artificial intelligence industry. Its accelerating growth metrics suggest that AI application is spreading from tech giants downstream to other enterprises. This trend is corroborated by recent developments at Nvidia (NVDA). At the recent GTC conference, Nvidia disclosed that the order backlog for its Blackwell and next-generation Rubin chips had reached “five trillion dollars,” far exceeding market expectations. Concurrently, the four tech giants – Amazon, Microsoft, Alphabet, and Meta Platforms – plan to invest $380 billion in capital expenditure this year alone, primarily for data center construction to support growing AI demand, with further increases in such spending expected through 2026.
As the dominant player in the data center GPU market, holding a 92% market share, Nvidia’s chips have become the industry standard for both AI training and inference. Despite recent views suggesting a relative slowdown in the pace of AI adoption, the combined evidence from Palantir’s results and Nvidia’s order situation indicates that market demand continues to flourish. Since the AI boom began in early 2023, Nvidia’s stock price has surged by 1320% cumulatively. Although a forward P/E ratio of 31 suggests a high valuation, considering the company’s projected average annual revenue growth rate of 27% over the next five years, the current valuation level can be considered reasonable. These signs indicate that the AI revolution is still in its early stages, and related companies still possess significant room for future development.
