Key Takeaways
- Palantir shares fell 10% today as the post-midterm sell-off in AI and defense stocks deepened, with no news from the company.
- U.S. government customers brought in 41% of Palantir’s third-quarter revenue, so a tighter Pentagon budget reaches the smaller part of its sales.
- Lockheed Martin fell far less today than Snowflake, pointing to AI valuations as the bigger force behind the drop.
- Palantir’s first 2027 guidance, due in early February, is the next real test.
Palantir Technologies (PLTR) is down 10% today, with no news of its own, as the post-election sell-off in AI and defense stocks rolled into a second day.
Defense stocks took the first hit on Wednesday, when Lockheed Martin (LMT) fell about 7% after Democrats won both chambers of Congress. Today, Lockheed is down just 2%, and the selling has moved to AI names like Snowflake (SNOW), down 6%.
Uncle Sam is the smaller customer now
Congress sets the Pentagon’s budget, and President Trump asked for $1.5 trillion for 2027, against the $901 billion approved now. Jefferies expects something closer to the House’s plan of about $1.15 trillion. Even that would be roughly 28% more than the current budget.
And Washington matters less to Palantir than it used to: in the third quarter, U.S. commercial revenue passed U.S. government revenue for the first time. U.S. government customers brought in $953 million of the quarter’s $2.31 billion, its 10-Q shows, up 96%.
Analysts expect revenue to quadruple from 2025 to 2028:
Nothing in today’s news should change this year’s number, and at today’s mix, most of the $12.4 billion expected for 2027 would come from customers outside Washington.
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Priced like an AI stock
AI infrastructure is taking the bigger hit. Bloom Energy (BE) is down 17% today, even after NTT DATA announced a 900 MW fuel cell agreement with Bloom at 9 a.m. ET.
Lockheed, with a record $292 billion backlog, trades at 20x forward earnings and held up better today. Snowflake, whose product revenue grew 37% in its July quarter, trades at 115x and fell. It reports on Dec. 2.
Palantir’s forward P/E, 94x before today, has swung widely over five years:
That’s below its five-year average of 102x and far from its 270x peak in October 2025, and today’s drop takes it lower still.
The real test comes in February
Palantir’s business looks the same as it did on Monday, when it beat its own forecast and raised its 2026 revenue guide to $8.53 billion. The way I see it, the market is marking down AI stocks as a group today, and Palantir is getting caught in it.
The risk I’d watch is bookings, since total contract value grew just 6% in the third quarter. Of course, a budget fight could still slow Pentagon orders in 2027. But first, Palantir’s 2027 guidance in early February will show whether it can top the Street’s $12.4 billion.
So what is Palantir stock actually worth?
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