Data-wrangling software company Palantir Technologies reports its quarterly earnings Monday afternoon. Expectations are high -- as usual.

Though the company and CEO Alex Karp have become political lightning rods, there is little disagreement on Wall Street regarding Palantir's financial performance. Analysts project the company will report 28 cents in first-quarter adjusted earnings per share, more than doubling the 13 cents it reported from a year ago. Sales are expected to rise by 75% to $1.5 billion, with 54% of revenue staying with the company as free cash flow. Last year Palantir had a 47% free cash flow margin.

With roots in U.S. defense and intelligence work, the U.S. remains Palantir's core market. While much of the coverage of the company revolves around its government contracts, it is Palantir's U.S. commercial sales that have been the star of the show. While U.S. government sales grew at a healthy 55% clip in 2025, commercial revenue grew by 109% to $1.5 billion. In the first quarter, analysts are projecting U.S. commercial sales to rise by 137% to $605 million, equaling U.S. government revenue.

Palantir software takes an organization's data, which may be spread out across many different systems and formats, and uses artificial intelligence to draw relationships between disparate data points, aiding customers in decision making. It is one of the few companies that has healthy profit margins selling AI services.

Despite that, Palantir stock has come under the same sorts of pressures as other software companies due to the narrative that "AI will eat software." In the past six months, shares declined by 30%, while the S&P 500 is up 6%.

This isn't to say that Palantir stock is cheap. Though much reduced from its November peak, the company's stock trades at 97 times its projected earnings per share for the next 12 months. The stock gets the big valuation premium -- forward P/E for the S&P 500 is 21 -- because of the company's high growth rates, profitability, and a corps of dedicated retail shareholders.