Once among Wall Street's hottest growth stocks, Palantir (PLTR) and SoFi (SOFI) have fallen sharply out of favor in 2026. Palantir shares are down about 24% year-to-date (YTD), while SoFi has lost more than 29% of its value.
Despite the selloff, the underlying businesses of these companies remain solid and continue to deliver strong financial results. At the same time, valuations have become far more reasonable than they were at their recent highs.
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With strong growth trends intact, these two beaten-down favorites could be setting the stage for a significant comeback.
Palantir Is Firing on All Cylinders
The pullback in Palantir's stock is largely driven by concerns over its premium valuation and intensifying competition from emerging AI companies. However, the company’s quarterly results suggest that the underlying business remains exceptionally strong, with demand for its Artificial Intelligence Platform (AIP) accelerating.
The company reported 85% year-over-year (YoY) revenue growth and 16% sequential growth, marking its eleventh straight quarter of accelerating expansion. More importantly, management significantly increased its full-year guidance, signaling confidence that customer demand remains robust despite growing competition in the AI landscape.
www.barchart.com Growth is being led by the U.S. market, where adoption of Palantir’s AI solutions is expanding across both commercial enterprises and government agencies. U.S. revenue surged 104% YoY, while the total customer base increased 31% to 1,007 organizations. The rise in average spending is equally notable, with revenue from the company’s top 20 customers climbing 55%, highlighting Palantir’s ability to deepen relationships after initial adoption.
The commercial business remains exceptionally. U.S. commercial revenue jumped 133%, highlighting the growing appeal of Palantir's AI solutions among private-sector customers. Government revenue also remained solid, rising 84% thanks to contract renewals and new program wins.
Several additional performance metrics support Palantir’s growth outlook. Net dollar retention reached an impressive 150%, meaning existing customers are spending substantially more than they did a year ago. Meanwhile, total contract value bookings surged 135%, providing strong visibility into future revenue growth.
Importantly, this rapid expansion is translating into rising profitability and cash generation. As a result, management increased its revenue, operating income, and free cash flow forecasts.
Taken together, its financial performance suggests that Palantir's competitive position is strengthening, not weakening. While valuation concerns may continue to create volatility, the underlying business is executing at an extraordinary level, indicating a solid rebound. For long-term investors, the recent weakness in the stock could be an attractive buying opportunity. Meanwhile, analysts have a “Moderate Buy” consensus rating on PLTR stock.
SoFi’s Growth Momentum to Sustain
SoFi Technologies came under pressure due to its previously high valuation and investors’ concerns about slower growth in parts of its capital-light business. However, the market is overlooking the company's strong underlying fundamentals and long-term growth potential.
SoFi’s growth trajectory remains solid. During the first quarter, SoFi added members at a record pace while expanding product adoption across its ecosystem. Management expects membership growth of at least 30% YoY in 2026, highlighting the strength of its customer acquisition strategy. As more members adopt multiple products, SoFi can lower customer acquisition costs while increasing engagement and lifetime value.
www.barchart.com Further, SoFi has diversified its revenue base. Its Financial Services segment continues to deliver strong growth, with revenue surging 41% YoY to $429 million in Q1. Strong performance across payments, investing, and other fee-based services shows the company's progress in building a more diversified and resilient business model.
Its Loan Platform Business (LPB), which allows SoFi to generate fee income without retaining credit risk on its balance sheet, continues to support its growth. The platform facilitated $3.8 billion in loan transfers during the quarter and secured $3.6 billion in new partner commitments, signaling strong demand and significant runway for future expansion.
The LPB also gives management valuable flexibility. Depending on market conditions, SoFi can choose to retain loans and capture higher long-term revenue or sell them through the platform to generate capital-light fee income. This balanced approach enhances both profitability and risk management.
Meanwhile, deposits climbed to $40.2 billion in Q1, further strengthening SoFi's low-cost funding base. A growing deposit base supports lending growth and, over time, improves margins and profitability.
While investor concerns surrounding lending exposure have pressured the stock, the company's underlying fundamentals remain strong. Membership growth, expanding financial services revenue, increasing LPB activity, and a growing deposit base all point to a business that continues to do well.
After its recent decline, SoFi presents an appealing opportunity for investors. Although Wall Street's consensus rating remains "Hold," the company's strong, consistent financial results suggest SOFI stock could be poised for a solid recovery.
On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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