Prediction: Palantir Stock Will Drop to This Price After Aug. 3

Palantir Technologies (NASDAQ: PLTR) is scheduled to release its second quarter earnings on Aug. 3. Throughout 2026, Palantir stock has endured a difficult stretch -- falling about 30% as investors rotate out of enterprise SaaS names amid new model features from Anthropic and OpenAI.

While the decline in Palantir stock has already reset some of the optimism that supported shares in prior years, the upcoming report still carries the potential for another drop. Read on to learn why.

Image source: The Motley Fool.

What should investors expect from Palantir's Q2 report?

Wall Street's consensus estimates for Palantir's second-quarter revenue and earnings per share (EPS) are $1.8 billion and $0.35, respectively. This implies annual revenue growth of 80% and a 169% jump in earnings year over year.

During the company's first-quarter report, management guided toward a similar trajectory: Revenue of roughly $1.8 billion and adjusted operating margins that would support earnings near the $0.35 level.

Looking at proxies for Palantir's upcoming earnings report

Given earnings season has just started, there aren't too many comparable SaaS companies to benchmark Palantir against. For now, International Business Machines (NYSE: IBM) and ServiceNow (NYSE: NOW) provide timely comparisons.

IBM actually pre-announced its second quarter results on July 14, specifically citing softer demand in software. Shares fell roughly 25% that day, making it IBM's worst day in the stock market since 1987. The company's full Q2 report was later published on July 22. As of July 24, IBM has traded roughly flat compared to its historic sell-off earlier this month.

ServiceNow also reported its latest earnings on July 22. Shares initially dropped as much as 4% in the hours after the release, reflecting concern that a respectable quarter still fell short of the elevated bar plaguing the entire SaaS landscape this year. Of note, ServiceNow has since recovered and now trades roughly 2% higher than pre-report levels.

IBM data by YCharts

What's interesting is that Palantir stock actually rose as ServiceNow dropped following news of IBM's prelim report. However, since IBM and ServiceNow both published their full results for the second quarter, each stock witnessed incremental signs of recovery while Palantir stock has actually started showing some weakness.

Why Palantir stock could continue selling off

The obvious point to make is that there have only been a limited number of trading sessions since ServiceNow and IBM reported earnings -- limiting the amount of reliable data. The immediate sell-offs followed by a modest rebound leaves a mixed signal rather than a decisive trend.

With that said, even if Palantir meets or modestly exceeds expectations, the stock remains vulnerable to a further decline. Some investors regard Palantir as richly valued on both a price-to-sales (P/S) and price-to-earnings (P/E) basis, and the valuation drop so far this year has not fully erased the sense that expectations are elevated.

PLTR PS Ratio data by YCharts

Compounding these views is the reality that agentic AI is still in the early stages of enterprise production deployment, creating uncertainty about how quickly Palantir can translate new applications into consistent, high-margin revenue.

In my eyes, a reasonable outcome for Palantir is a post-earnings decline around 5%, which would bring the shares from their recent level near $123 down to about $117. Such a move would reflect more of a continued recalibration of risk rather than a large-scale rejection of the company's long-term story, acknowledging that near-term catalysts remain clouded by both valuation premiums and execution questions.

Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends International Business Machines, Palantir Technologies, and ServiceNow. The Motley Fool has a disclosure policy.