Palantir's stock fell 8% despite crushing earnings and raising 2026 guidance, signaling that investor expectations may be too lofty even for strong AI performers like Nvidia

Palantir Technologies reported first-quarter revenue of $1.63 billion, up 85%, with U.S. government revenue up 84% and U.S. commercial sales more than doubling. CEO Alex Karp raised the company's 2026 full-year sales guidance from 61% growth to 71%.

Despite the strong results, Palantir shares lost more than 8% of their value in the two days following the report. The article attributes this decline to investor expectations being too lofty: Palantir maintains a price-to-sales (P/S) ratio above 60, and history shows that industry leaders at the forefront of game-changing technology have failed to maintain a P/S ratio above 30 for an extended period.

Nvidia is scheduled to report fiscal first-quarter results (ending April 26) after the closing bell on May 20. The article suggests that even strong earnings may not prevent a stock decline on May 21, as history shows that every game-changing technology spanning more than three decades has endured an early-stage bubble-bursting event brought about by investors overestimating adoption and optimization.