Palantir Beats Sales Estimates, Raises Outlook with AI Boost

Palantir Stock

Palantir Technologies Inc. (NYSE:PLTR) outperformed analysts’ expectations for sales in the first quarter and revised its annual revenue forecast upwards, citing increased demand from U.S. companies for its innovative artificial intelligence software.

The company reported sales of $634.3 million for the period ending March 31, marking a 21% increase from the previous year. Analysts had anticipated sales of $615.8 million, according to data compiled by Bloomberg. Palantir also achieved a net income of $106 million, its largest quarterly profit to date, significantly surpassing the average estimate of $83 million. Notably, Palantir recorded its first profitable year in 2023.

Founded by Peter Thiel, Palantir specializes in developing software and analytical tools for both corporate entities and government agencies aligned with U.S. interests. Its software is utilized by defense forces supporting Ukrainian and Israeli objectives, as well as by U.S. allied military endeavors aimed at countering Chinese aggression in Taiwan—a stance that has caused some investors to express concerns.

Chief Executive Alex Karp affirmed in an interview that the company is pro-Ukraine and pro-Israel, acknowledging that not everyone desires to align with their stance.

While Palantir initially focused on government sales—backed by the venture arm of the U.S. Central Intelligence Agency—it now observes “unbridled and growing demand” from U.S. businesses, as highlighted by Karp in a letter to shareholders.

Palantir promotes its AI software through boot camps, a strategy led by engineers to swiftly onboard customers in just a few days instead of months. This approach is credited with driving a 69% surge in U.S. commercial customers, totaling 262 during the first quarter.

Revenue-wise, Palantir reported $335 million from government sources and $299 million from commercial sources in the first quarter.

Analysts anticipate that commercial revenue will surpass government sales next year.

Based on unrealized deal value and persistent demand, Palantir slightly adjusted its annual revenue forecast to a range of $2.68 billion to $2.69 billion. It also revised its outlook for adjusted operating income to a range of $868 million to $880 million, surpassing analysts’ expectations of $846.6 million.

For the current quarter, Palantir anticipates revenue of $649 million to $653 million and adjusted income from operations of $209 million to $213 million.

Palantir stands out as one of the leading stocks in the current AI-driven tech frenzy, with its new products propelling it to a growth of over 200% in the last 12 months.

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