Palantir Technologies Inc. (NASDAQ: PLTR) navigated a volatile week, closing Friday at $136.88, a 0.39% dip on the day but a 2.16% gain from the prior Friday's close of $133.99. The stock's weekly advance comes amid a flurry of developments that underscore both the promise and the perils of its artificial intelligence (AI) strategy. U.S. markets will be closed Monday for Memorial Day, giving traders a pause before Tuesday's open.
The company's AI narrative remains front and center. Earlier this month, Palantir lifted its 2026 revenue outlook to a range of $7.65 billion to $7.66 billion, following a first quarter that saw revenue surge 85% year-over-year to $1.63 billion. U.S. commercial revenue jumped 133%, while U.S. government revenue climbed 84%. Chief Executive Alex Karp described the U.S. as the "center" of Palantir's business, which he said is "erupting." The company also highlighted a Rule of 40 score of 145%, a metric combining revenue growth and profit margin that signals disciplined expansion.
During the week, shares oscillated between $131.33 and $139.02, ending Friday below the May 4 earnings-day close of $146.03. The stock's recent price action reflects ongoing investor debate over whether Palantir's AI premium is justified, especially as growth rates may face headwinds from a larger revenue base.
In a positive catalyst, Dell Technologies (NYSE: DELL) announced a partnership with Palantir to deliver an on-premises AI operating system. The deal integrates Palantir's Foundry and Ontology platforms with Dell's AI Factory hardware, which uses Nvidia (NASDAQ: NVDA) chips. Dell CEO Michael Dell said businesses must "turn intelligence into impact at speed," while Nvidia CEO Jensen Huang declared enterprise AI adoption is "going parabolic."
On the political front, London Mayor Sadiq Khan blocked the Metropolitan Police's planned £50 million contract with Palantir, citing a "clear and serious breach" of procurement rules. Palantir's UK and Europe chief, Louis Mosley, accused Khan of "putting politics above public safety." The dispute is significant for Palantir, as public sector contracts are a major growth driver, and heightened scrutiny over data access and ethics could slow deal flow even amid strong AI demand.
After Friday's close, a regulatory filing revealed that CEO Alex Karp converted 397,744 Class B shares to Class A shares and immediately sold all the new Class A shares. The sales were automatic to cover tax withholding on vested stock units, executed under a preset Rule 10b5-1 trading plan, and do not signal a shift in operational outlook.
Wall Street remains split on Palantir's valuation. According to MarketScreener, 31 analysts have an average "outperform" rating, with price targets ranging from $70 to $255 and a consensus of $183.73. Jefferies analyst Brent Thill warned that the key risk is whether growth can sustain its pace as the company scales, noting the stock requires a "heroic durability assumption." He cautioned that fading AI hype, slower government deals, or even a modest growth deceleration could trigger a de-rating.
As trading resumes Tuesday, investors will watch whether Palantir can hold above Friday's intraday low of $134.30 or challenge the weekly high of $139.02. Beyond near-term levels, the central question remains whether robust AI-driven spending by government and commercial clients can outpace rising valuation concerns from analysts, regulators, and public sector customers.
