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Palantir’s stock surges nearly 20% as company rides AI wave to upbeat earnings, outlook

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Palantir Technologies Inc. edged out expectations for the latest quarter, as the software company said Monday that its artificial-intelligence story continues to play out, and its stock jumped nearly 20% in extended trading.

The company logged fourth-quarter revenue of $608 million, up 20% from a year before and ahead of the FactSet consensus, which was for $603 million.

Though Palantir
PLTR,
-1.76%

trailed the consensus view with its top-line expectations for the first quarter — management models $612 million to $616 million, while analysts were looking for $617 million — the company exceeded forecasts with its full-year outlook. The company anticipates $2.652 billion to $2.668 billion in 2024 revenue, whereas the FactSet consensus was for $2.644 billion.

“We’re focused on continuing to build on the success of U.S. commercial,” Chief Financial Officer David Glazer told MarketWatch. The company is rebuilding itself “around those successes” with a “huge amount of runway ahead,” he said.

The stock rose 17.3% in after-hours trading Monday.

In the fourth quarter, Palantir’s U.S. commercial business saw 70% growth in revenue to $131 million.

“The demand for large-language models from commercialinstitutions in the United States continues to be unrelenting,” Chief Executive Alex Karp said in a letter to shareholders. Palantir’s “momentum with AIP is now significantly contributing to new revenue and new customers.”

See also: Palantir’s CEO has this message for skeptics and believers alike

The company noted that while it conducted fewer than 100 commercial pilots during 2022, it had nearly 600 pilots and bootcamps with just its Artificial Intelligence Platform during 2023.

Customers see “hundreds of use cases” for AIP, Chief Revenue Officer Ryan Taylor told MarketWatch. He said the company has “barely scratched the surface” in terms of customer momentum.

The company expects to see upward of $640 million in U.S. commercial revenue for 2024, up at least 40%.

Palantir logged its fifth consecutive quarter of GAAP profitability in the period that just finished, delivering net income of $93 million, or 4 cents a share, up from $33 million, or 1 cent a share, in the year-before quarter.

Analysts had been modeling 3 cents a share in earnings.

Palantir matched expectations with its adjusted earnings per share, which came in at 8 cents.

It expects to record GAAP net income in each quarter of 2024.

Glazer flagged the company’s “strong” 34% margin on adjusted operating income for the fourth quarter, while noting that Palantir was “really going to invest this year” in pursuit of AI opportunities.

While the company’s overall commercial business grew 32% in the fourth quarter to $284 million, its government business expanded more slowly, at 11%, to hit $324 million. Analysts were expecting $271 million in commercial revenue and $333 million in government revenue.

Palantir’s stock has doubled over the past 12 months, as the S&P 500
SPX
has advanced 20%.

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