Palantir stock is down 8%. Analysts say bookings growth is to blame.

By Nora Redmond

Shares in Palantir Technologies fell 8% in premarket trading on Tuesday.

Palantir Technologies' stock stumbled on Tuesday despite the software company reporting its first quarterly revenue of over $2 billion. Analysts think investors were likely displeased by slowing bookings growth.

Shares in the Miami-headquartered group (PLTR), which went public six years ago, fell 8% to $164.05 in premarket trading.

While the defense contractor saw its revenue almost double year-on-year, with a strong operating margin and earnings, the company also posted a slowdown in multiple bookings metrics. Growth in current remaining performance obligations, or cRPO - which measures contracted revenue expected to be recognized over the next 12 months - fell, as did the growth rate for total contract value (TCV) bookings and U.S. commercial remaining deal value (RDV).

Analysts at Morgan Stanley, led by Sanjit Singh, outlined the decelerations as points worth looking at in an otherwise "remarkable" set of financial results. They noted that total customer growth, commercial customer growth and U.S. commercial customer net additions also showed signs of softening.

Palantir's management said difficult quarter-on-quarter comparisons -owing to an exceptionally robust period ended June - and shorter contract durations as headwinds to bookings growth.

However, CNBC commentator Jim Cramer said Palantir's stock price decline has come from investors "willing" it lower.

"Enough, people are saying they see a slowdown in Palantir's business," he wrote in a post on X early Tuesday morning. "I do not know how anyone can say that unless they want it lower."

For Dan Ives, partner and head of technology research at Yorkville Ives, the company's results show that it remains a bright spot in the software sector.

"While much of software is still being asked to prove that AI adds to revenue rather than replacing it, Palantir is answering that question every quarter, with customers moving from pilots to production deployments and then expanding those deployments across their organization," he wrote in a Monday note.

Ives added that this earnings report proved Palantir is converting demand into revenue and cash at a speed the rest of the software industry is unable to replicate, with a full-year free cash flow outlook of between $4.8 and $5 billion underlining this.

-Nora Redmond

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