Palantir Shares Rise on Upbeat Profit Outlook, Signaling AI Demand

(Bloomberg) — Shares of Palantir Technologies Inc. jumped in trading Tuesday after the company raised its annual outlook, citing continued demand for its artificial intelligence software.

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In a call with analysts on Monday, Palantir CEO Alex Karp said the earnings report was “historic” for the company, which provides data analysis tools to businesses and governments, including for defense and intelligence purposes. . Karp also said he believes it is a significant moment for the US. “The world is on the brink of what could be a very serious set of violent interactions in the Middle East,” he said.

Palantir raised its 2024 revenue guidance to a range of $2.74 to $2.75 billion. Analysts were expecting $2.7 billion, according to data compiled by Bloomberg. The company also raised its adjusted operating profit outlook to a range of $966 million to $974 million for the year. Analysts expected $882.9 million.

Shares rose as much as 13.8% after opening trading in New York on Tuesday. Shares had already gained 40% this year as of Monday’s close.

Karp emphasized the importance of the company’s military business in a letter to shareholders on Monday. “The strength and dominance of the U.S. military must be preserved and defended,” he wrote, adding that this belief should be “common and normal” but has become “radical and risky in certain circles of elite opinion.”

Karp also said that Palantir’s AI platform, launched just over a year ago, has “already transformed” its business.

Co-founded by billionaire Peter Thiel in 2003, Palantir has emphasized its work with the US government and its allies. The company’s software is now used in all branches of the US military and is involved in developing the country’s AI capabilities. After the second quarter, the company’s trailing-12-month revenue from the U.S. government surpassed $1 billion for the first time, he said.

Palantir also recently expanded its commercial business. The company reported commercial sales of $307 million, a 33% increase from the previous year, in line with analyst estimates compiled by Bloomberg. Government sales were $371 million in the June quarter, the company said, an increase of 23%. Analysts had expected government sales of $346.6 million during the June quarter, according to data compiled by Bloomberg.

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Sales for the quarter rose 27% to $678 million, beating Wall Street estimates of $652.8 million. Net profit during the June quarter rose to $134 million. Analysts expected net profit of US$82.8 million.

“With these results we maintain our eligibility for the S&P,” Palantir Chief Financial Officer David Glazer said in an interview on Monday, referring to the company’s possible inclusion in the S&P 500 index, an event many investors are awaiting. “It’s S&P’s decision.”

(Updates stock price.)

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