Palantir Technologies: On a Growth Path Thanks to the AI Boom

Palantir Technologies has raised its revenue forecast for the third time this year, driven by increased government spending and rising demand from companies seeking to implement generative AI technologies. These positive prospects led to an approximately 8% increase in the company’s shares in after-hours trading. The data analytics company is notably benefiting from the rapid spread of GenAI technologies, as more and more companies use its AI platform to test code, debug, and evaluate AI-related scenarios. For the coming year, Palantir now expects revenue in the range of $2.805 billion to $2.809 billion, compared to a previous estimate of $2.742 billion to $2.750 billion. Palantir, one of the biggest beneficiaries of the surge in AI-related stocks, has boosted its shares by more than 140% so far this year and was included in the S&P 500 in September, significantly outperforming the index’s year-to-date gain of 20%. The target for adjusted operating income was also raised to $1.05 billion to $1.06 billion, from the previously expected $966 million to $974 million. However, it was also evident that a significant portion of the revenue comes from government spending. In the third quarter, revenue from the U.S. government rose by 40%, accounting for over 44% of total revenues of $725.5 million and exceeding analysts’ expectations of $701.1 million. Palantir also recorded the largest profit in its company history with a net income of $144 million in the third quarter. While Palantir’s growth is undeniable, not all is rosy: Norwegian major investor Storebrand Asset Management recently sold its shares in Palantir, due to concerns about the ethical implications of the company’s cooperation with Israel. Lastly, the company also forecasted fourth-quarter revenues that exceed expectations.