Palantir Grew Revenue 85% and Raised Guidance — So Why Is PLTR Down 26% YTD?

A company growing revenue 85% year-over-year, crossing a $6.5 billion annualized run rate, raising full-year guidance by 10 full percentage points, and running at 60% adjusted operating margins — this is what getting crushed in the market looks like.

Palantir Technologies ($PLTR) reported Q1 2026 results on May 7 that shattered every financial metric analysts were tracking. The 85% topline growth was the fastest the company has posted since its 2020 market debut. U.S. government revenue surged as AIP (Artificial Intelligence Platform) deployments spread across the Pentagon, the intelligence community, and a growing roster of federal agencies. Remaining Performance Obligations — the non-cancelable contracted revenue sitting in the pipeline — hit a record, up 134% year-over-year.

And the stock is down 26% in 2026.

Let's state the obvious: 85% growth at $6.5B+ ARR has never been done before in enterprise software at this scale. The closest historical comparison is 1990s Microsoft, and even that doesn't fully match. Palantir's growth re-accelerated from 17% to 85% over six quarters — the textbook pattern of a company that has broken through product-market fit at the enterprise level.

The numbers that matter most: Remaining Performance Obligations (RPO) — the non-cancelable contracted future revenue — grew 134% YoY. RPO grew faster than revenue itself, which is the cleanest possible signal that 2026 and 2027 are going to be even bigger. New commercial logos in Q1 included Airbus, Bain, GE Aerospace, and Stellantis — exactly the legacy industrial and consulting buyers everyone said were too slow to deploy AI at scale.

So Why Is PLTR Down 26%?

This is the question that every Palantir bull — and there are many — has to answer. The stock trades at a valuation that prices in perfection, and the market has rotated away from high-multiple growth names into value and defense plays with clearer near-term catalysts. There's also a specific bear case being advanced aggressively by one very famous investor.

Michael Burry — the "Big Short" investor who famously called the 2008 housing crash — has maintained a significant short position in Palantir throughout 2026. He's said publicly the stock is worth less than $50 a share.

Burry's thesis is straightforward: Palantir trades at a valuation that assumes the 85% growth rate is sustainable indefinitely. At roughly 50x forward earnings even after the sell-off, any deceleration would trigger a violent re-rating lower. He's added NVIDIA puts to his portfolio while rotating into value names like Adobe, Salesforce, and Intuit.

The bulls counter: 85% growth with 60% operating margins is a combination that didn't exist before the AI cycle. The government AIP backlog has a multi-year visibility that most software companies would kill for. And Rosenblatt just reiterated a $225 price target — implying roughly 100% upside from current levels.

The Verdict

Both sides have legitimate arguments, which is exactly why this is the most interesting stock in the market right now. The growth trajectory is undeniable. The valuation debate is unresolved. And the U.S. government's AI spending supercycle — fueled by programs like Golden Dome and broader defense modernization — provides a multi-year tailwind that doesn't depend on commercial adoption.

Stat of the quarter: Palantir generates $1.5 million in revenue per employee. That's not a typo. The AI-native operating model is live, and it's printing margins that traditional enterprise software has never seen.