Palantir Technologies Inc. (PLTR) saw its stock advance 2.8% to $139.71 during Monday's morning session, trading between $134.81 and $140.69. This uptick follows a broad-based retreat in software shares last week, which was triggered by concerns over new artificial intelligence legal applications.
Market Context and Sector Movement
The software sector has underperformed the broader S&P 500 by nearly 24 percentage points over the past three months. The recent selloff was ignited by the introduction of a legal tool built on Anthropic's Claude large language model. Market volatility expectations remain elevated, with the 30-day implied volatility for the iShares Expanded Tech-Software Sector ETF hovering around 41%.
Other technology names also moved higher Monday morning. The software-focused IGV ETF gained 1.1%, while Nvidia (NVDA) rose 3.1% and Oracle (ORCL) jumped nearly 10%.
Palantir's Financial Outlook
Last week, Palantir provided forward-looking revenue projections, forecasting 2026 sales of up to $7.2 billion. The company also reported fourth-quarter revenue of $1.41 billion, driven by a 66% year-over-year increase in U.S. government revenue to $570 million. For the first quarter, management anticipates sales between $1.53 billion and $1.54 billion.
Despite the positive figures, valuation concerns persist. At the time of its earnings report, the stock traded at a 12-month forward price-to-earnings ratio of approximately 140. Analyst Zavier Wong of eToro noted that "valuation question marks won't disappear." CEO Alex Karp emphasized the company's critical support for unspecified U.S. government operations.
What Investors Are Monitoring
The near-term focus shifts to economic data, with the January U.S. jobs report and Consumer Price Index both scheduled for release this Friday. These figures could significantly influence interest rate expectations and, consequently, investor appetite for high-growth stocks like Palantir.
Looking ahead, Palantir's next earnings release is expected on May 4. The broader market debate continues over whether AI advancements will ultimately expand software demand or disrupt existing business models, keeping volatility in focus for the sector.
