Palantir shares fell on Tuesday after the software company reported third-quarter earnings and analysts pointed to signs of a slowdown in total contract value and other "forward indicators."
U.S. commercial revenue topped government for the first time, but the company closed $1.5 billion in TCV in the segment, up 11% from last year. In Q2, Palantir closed a record $2.1 billion worth of TCV in the segment, which was up 153% from the prior year.
Investors will "no doubt be looking for evidence in subsequent quarters that 11% growth in U.S. commercial TCV bookings is a fluke of duration and not something structural," a Piper Sandler note from Monday said. "We believe that is the case and demand for PLTR's solutions still very much outstrip supply."
In a Tuesday note, Goldman Sachs analysts noted that the company attributed some of this to shorter contract durations.
"The key will be converting shorter duration contracts into longer duration commitments, which Palantir has done successfully in the past," the analysts wrote.