Palantir Technologies (PLTR) announced on Monday that it has raised its annual revenue forecast for the third time this year, driven by robust government spending and growing demand for its software services, particularly from businesses seeking to adopt generative AI technology.
Following the news, shares of the data analytics firm jumped approximately 13% in after-hours trading. Palantir has capitalized on the increasing interest in generative AI, with many companies turning to its AI platform for tasks such as code testing, debugging, and evaluating AI-related scenarios.
The company now anticipates 2024 revenue to be between $2.805 billion and $2.809 billion, a significant increase from its previous estimate of $2.742 billion to $2.750 billion.
Palantir is one of the major beneficiaries of the recent surge in AI-related stocks, with its share price soaring over 140% this year. The company was also added to the S&P 500 index in September, outperforming the index’s 20% gain to date.
In addition to its revenue outlook, Palantir raised its forecast for adjusted income from operations to a range of approximately $1.05 billion to $1.06 billion, up from an earlier estimate of $966 million to $974 million. CFO David Glazer commented, “Top line growth, which is driven by the demand for AI, is flowing through to the bottom line,” highlighting the strong performance of the company.
While Palantir’s commercial business is expanding, a significant portion of its revenue continues to stem from government contracts. The company reported a 40% increase in U.S. government revenue in the third quarter, which accounted for over 44% of total sales, amounting to $725.5 million. Analysts had projected total sales of $701.1 million, according to data from LSEG.
Looking ahead, analysts predict that Palantir’s commercial sector, which includes business sales, may surpass its government revenue by next year. Gil Luria, head of technology research at D.A. Davidson, noted, “Government agencies take a lot longer to make decisions, while commercial customers can make much faster decisions to buy software, which is what we’re seeing right now.”
Related topics:
