Palantir's stock surges as AI drives a further acceleration in growth

MW Palantir's stock surges as AI drives a further acceleration in growth

By Emily Bary

CEO calls latest earnings 'a slap in the face of people who continue to believe that the value of AI is solely in building AI large-language models'

Palantir Technologies Inc. posted accelerating quarterly growth on Monday afternoon, again fueled by artificial intelligence.

While Wall Street generally has been skeptical about whether AI has delivered meaningful financial benefits to software companies thus far, Palantir's (PLTR) roughly 150% stock rally so far in 2024 shows that investors have given the enterprise software company respect for its own AI initiatives.

That rally looks set to continue, with Palantir shares up 13% in the extended session.

Palantir's latest results are, "dare I say, a slap in the face of people who continue to believe that the value of AI is solely in building AI large language models," Chief Executive Alex Karp told MarketWatch.

The company logged revenue of $726 million for the third quarter, up 30% from a year prior and ahead of the $705 million FactSet consensus. Palantir has posted accelerating revenue growth since the second quarter of 2023, "an ascent that we always believed was possible and have worked tremendously hard to achieve," Karp said in his shareholder letter.

The U.S. business is growing faster than the company as a whole, with its revenue up 44% in the latest quarter relative to a year before. U.S. commercial revenue was up 54%, while U.S. government revenue was up 40%.

"We absolutely eviscerated this quarter, driven by unrelenting AI demand that won't slow down," Karp said in the letter. "This is a U.S.-driven AI revolution that has taken full hold."

Chief Revenue Officer Ryan Taylor noted that Palantir's artificial-intelligence platform is delivering benefits for companies across industries, giving the example of an insurance company that's been able to cut the typical underwriting time down to three hours from two weeks previously.

Palantir anticipates $767 million to $771 million in revenue for the fourth quarter, above the $745 million consensus view.

"We're seeing real impacts through the delivery of AI," Taylor said.

Palantir again posted a GAAP profit, with net income of $144 million, or 6 cents a share, which was roughly double what the company saw a year before.

On an adjusted basis, Palantir earned 10 cents a share, a penny above consensus expectations.

"You're just seeing the underlying unit economics to the business," Chief Financial Officer David Glazer said. He noted that Palantir is investing in the business through hiring and other means, but also sporting profitability. Over the past 12 months, Palantir collected more than a billion dollars in cash, he added.

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

November 04, 2024 16:16 ET (21:16 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.