AI-powered software company Palantir (PLTR) will report its first-quarter financial result on Monday, May 5. The company has consistently delivered solid performance over the past four quarters, and Q1 will be no different. As businesses and governments continue to leverage AI to drive efficiency, reduce costs, and boost productivity, Palantir could see higher demand for its artificial intelligence (AI) solutions.

Palantir is witnessing strong demand for its AI platform (AIP), which is driving its customer base and resulting in larger contract wins, with total contract value (TCV) accelerating at an impressive clip. PLTR has consistently delivered robust financial results over the past four quarters. That momentum has translated into a stellar stock performance. Since the beginning of 2025, Palantir shares have surged by more than 59.7%, significantly outpacing the broader market. In contrast, the S&P 500 Index ($SPX) has slid nearly 3.7% year-to-date.

With the company delivering solid growth, let’s look at whether Q1 could further lift its stock.

Palantir: Q1 Expectations

Palantir’s top-line growth rate has grown sequentially and year-over-year over the past several quarters. For the first quarter, Palantir has guided revenue to be in the range of $858 million to $862 million. That would represent a 35% to 36% increase from the $634.34 million it reported in the same quarter a year ago. This level of growth would be consistent with the trajectory seen in the fourth quarter of 2024, when the company posted a 36% year-over-year increase and a 14% sequential growth in revenue.

The key growth catalyst for Palantir is its U.S. business, which benefits from the high demand for AI solutions. In the fourth quarter, U.S. commercial revenue jumped 64% year-over-year and 20% from the prior quarter, highlighting the rapid adoption of AIP among enterprises. Meanwhile, the U.S. government segment, long a stable source of revenue for Palantir, saw impressive 45% growth year-over-year.

This momentum in Palantir’s business will likely sustain Q1 as AIP continues to fuel new customer acquisitions. Palantir’s U.S. commercial customers have grown about five times in three years. Moreover, the company is generating higher revenues from existing customers.

For instance, Palantir had grown its customer base to 711 by the end of the fourth quarter of 2024, a 43% increase year-over-year. Notably, revenue from its top 20 customers rose 18% year-over-year, with each generating an average of $65 million over the trailing 12 months. That level of customer stickiness and expansion shows the solid demand for its offerings.

The fourth quarter saw the company secure its strongest-ever commercial TCV, hitting $995 million — a 42% year-over-year increase and a 63% rise from the third quarter. This surge in bookings shows continued demand and accelerating commitment from enterprise clients, many of whom could ramp up their AI investments through AIP.

On the profitability front, Palantir is equally impressive. The company delivered a record adjusted operating margin of 45% in the fourth quarter — the highest in its history. This financial discipline and strong revenue growth could translate into stronger earnings in Q1. Analysts project Palantir to deliver earnings per share of $0.08, double what it reported in the same quarter last year.

While some caution remains around potential headwinds, such as reductions in U.S. government defense spending, Palantir appears well-positioned to offset these with continued commercial growth and new government contracts focused on AI modernization. The company’s deep integration into high-value, mission-critical systems makes it a difficult vendor to replace and a likely beneficiary of AI-driven demand.

Conclusion: Strong Q1 Could Push Stock Higher, But Valuation Is Rich

Palantir enters its Q1 earnings with strong momentum and a growing customer base. If the company continues delivering on growth and profitability, its stock could see another meaningful boost. Moreover, with AI adoption showing no signs of slowing, Palantir has a long runway for expansion.

That said, Palantir’s stock has already seen a substantial run-up, and with that comes a premium valuation. While the growth story remains compelling, Wall Street analysts are exercising caution. The consensus rating on the stock is a “Hold.”