Palantir (PLTR, Financial) fires on nearly all cylinders in Q1, delivering over 30% top-line growth and an 83% rule-of-40 score even as shares slipped more than 7% in premarket trading.

Analysts at Wedbush Securities lifted their price target to $140 from $120, calling Palantir “a generational tech name” poised for a trillion-dollar market cap within three years after the company beat guidance and raised its outlook for fiscal 2025.

Josh Arnold of Timely Trader echoed the sentiment, calling the results “another blowout” and highlighting that free cash flow and operating profit guidance rose well ahead of revenue growth, “implying significant runway for operating leverage going forward,” though he warned valuation is catching up to fundamentals.

Morgan Stanley's Sanjit Singh agreed that Palantir is “firing on nearly all cylinders,” praising accelerating deal closures in both government and commercial markets amid broader macro uncertainty.

Singh kept an Equal-Weight rating but nudged his price target up to $98 from $90, citing 30%+ revenue growth and an 83% rule-of-40 score as evidence that Palantir has cemented its status as an AI software leader. Bank of America's Mariana Perez Mora maintained her Buy rating, noting that strong demand across segments drove the topline beat and continues to accelerate growth rates.

Why it matters: Palantir's Q1 performance reinforces its AI-driven growth story and operating leverage potential, but the premarket stock dip signals that investors remain wary of the premium valuation.

Investors will now focus on Q2 guidance and the pace of large deal closures in government and commercial pipelines when Palantir reports next quarter results.