For Palantir's ($PLTR) Q3 2026 earnings, the main negative issue and the primary reason the stock isn't surging higher despite beating top- and bottom-line estimates is sky-high valuation and multiple compression risk. Key Concerns From the Q3 Report 1/ Extreme Valuation / Priced to Perfection Heading into the report, $PLTR traded at over 115x to 150x forward earnings. Even with blowout revenue growth (+96% YoY to $2.31 billion) and strong EPS of $0.44, the market had already priced in flawless execution. Because expectations were set so high, a standard earnings beat isn't driving a huge post-earnings rally. 2/ Sequential Guidance decelerations While full-year guidance was raised, analysts closely monitor sequential (quarter-over-quarter) growth rates. Any hint that growth rates are peaking relative to prior quarters makes it hard for the stock to sustain its steep valuation multiple. 3/ Heavy Insider & Institutional Selling In the weeks leading into earnings, filings showed insider stock sales exceeding $97 million to $150 million over recent months alongside notable ETF net-selling, signaling profit-taking near all-time high valuation levels.