Lofty expectations

Palantir's stock slid 12% today, denting its meteoric start to the year, despite the AI data software giant raising its outlook on revenue and adjusted operating income yesterday.

• When valuations grow large, so do expectations.

Between the lines: Investors zeroed in on a pullback in international commercial revenue, potentially signaling the rapidly expanding company is running into growth constraints.

• The stock's rapid ascent might also have prompted some profit taking: Mizuho analyst Gregg Moskowitz said Palantir's share price was "very difficult to justify," and Raymond James analyst Brian Gesuale said Palantir needs to "grow into its rich valuation," CNBC reported.

🔥 Context: Palantir has enjoyed a blistering year, with its stock rising over 330% over the last 12 months. Huge expectations around its opportunity in artificial intelligence earned the company the moniker "Messi of AI" from one analyst in reference to the Argentinian soccer legend.

Zoom in: Stock slide aside, there was still news for Palantir bulls to hang their hats on yesterday:

• The company's "U.S. business is on fire," CEO Alex Karp said on an earnings call. "Both the adoption and the rate of product development has exceeded expectations."
• Tech bull analyst Dan Ives of Wedbush Securities — who gave Palantir the Messi nickname — today raised his price target from $120 to $140.
• Ives said the company is "seeing significant traction across both enterprise and federal landscapes" with its AI platform.