Palantir Technologies Inc. saw its stock jump in premarket trading on Tuesday following the company’s announcement of an increased annual outlook, driven by sustained demand for its artificial intelligence (AI) software.
During a call with analysts on Monday, CEO Alex Karp described the earnings report as “historic” for Palantir, which provides data analysis tools to various sectors, including defense and intelligence. Karp also highlighted the geopolitical tensions, particularly in the Middle East, as a significant backdrop for the company’s operations. “The world is on the precipice of what could be a very severe set of violent interactions in the Middle East,” Karp noted.
Palantir adjusted its 2024 revenue forecast to between $2.74 billion and $2.75 billion, surpassing analysts’ expectations of $2.7 billion, according to Bloomberg data. The company also raised its adjusted operating income projection to a range of $966 million to $974 million, well above the anticipated $882.9 million.
In a letter to shareholders, Karp emphasized the critical role of Palantir’s military business, asserting that maintaining and defending the strength of the US military is essential. He remarked that while this viewpoint should be widely accepted, it has become “radical and risky” in some elite circles.
Karp highlighted the transformative impact of Palantir’s AI platform, which was launched just over a year ago, on the company’s business operations.
Following the earnings call, Palantir’s shares surged as much as 13% in premarket trading, after closing at $24.09 in New York. The stock has gained 40% this year through Monday’s close.
Founded in 2003 by billionaire Peter Thiel, Palantir has prioritized its collaboration with the US government and its allies. The company’s software is extensively used across all branches of the US military and plays a pivotal role in developing the country’s AI capabilities. For the first time, Palantir’s trailing 12 months of revenue from the US government has exceeded $1 billion, the company reported.
Palantir has also expanded its commercial sector business, reporting commercial sales of $307 million for the June quarter, a 33% increase from the previous year and aligning with analysts’ estimates. Government sales for the same period were $371 million, up 23% and exceeding analysts’ expectations of $346.6 million.
Overall sales for the quarter rose by 27% to $678 million, surpassing Wall Street estimates of $652.8 million. Net income for the June quarter was $134 million, significantly higher than the expected $82.8 million.
Palantir’s Chief Financial Officer David Glazer noted the company’s eligibility for inclusion in the S&P 500 Index, an event eagerly anticipated by investors. “It’s the S&P’s call,” Glazer stated in an interview on Monday.
