Why Palantir Investors Aren't Panicking While the Rest of AI Sells Off

Summary

Palantir Technologies NASDAQ: PLTR is down about 30% in 2026. But over the last 30 days, PLTR is up about 5%, while other AI stocks have moved much more sharply in either direction. Palantir Technologies TodayPLTRPalantir Technologies$122.92 -0.45 (-0.36%) As of 07/24/2026 04:00 PM Eastern52-Week Range$106.37▼$207.52P/E Ratio138.11Price Target$189.88 One narrative says that this is just Palantir growing into its valuation. Even with the slide in 2026, PLTR still trades at over 100x forward earnings and has a trailing price-to-sales (P/S) ratio of about 65x.Get Palantir Technologies alerts:Sign Up However, while inflation readings and the conflict in the Middle East are causing volatility across the AI sector, Palantir has been less affected. That could be due to its focus on government agencies. The company’s government and critical-infrastructure client base positions it to maintain growth even during economic downturns. The question on many investors’ minds is what comes next. Palantir reports its Q2 2026 earnings on Aug. 3. If history is any guide, it will be a strong report. But for the last couple of earnings reports, "strong" hasn’t been enough to push the stock price higher. However, Palantir’s consistently impressive results are the unstoppable force pushing a stock price that doesn’t want to move higher. Another strong report could change that equation. Why Wall Street Keeps Undervaluing Palantir StockPalantir bears often rely on conservative discounted cash flow (DCF) models, which typically assume 20% to 30% annual growth in free cash flow and earnings per share (EPS). That may be standard for a maturing software company, but bulls argue it is far below the growth Palantir just reported. Q1 2026 adjusted free cash flow hit $925 million, up 150% year over year. Adjusted EPS came in at 33 cents, also up roughly 150%. Those growth rates are five to seven times higher than what conservative models assume. Now add CEO Alex Karp's own forecast. He told CNBC tha...