PLTR rally rescue Market from Monday's chills?
Mon, 05 Feb 2024.
Honestly, I did not see it coming - the way US market behaved on the start of February’s 2nd trading week.
Fell, it did — led downward by the tech-heavy Nasdaq Composite, as investors grew increasingly cautious of rising bond yields.
Was it really investors’ taking profits after rousing new heights scaled by the S&P 500 index consecutively for the past few weeks?
CBS - 60 Minutes, starring Jerome Powel.
Perhaps it was Mr Jerome Powell’s hour long interviews on CBS’s current affairs program “60 Minutes”, aired on Sun, 04 Feb 2024 that spooked US market and encouraged investors to take profit while still ahead ? (see above)
Key takeaways:
Fed Chair Jerome Powell vowed that the central bank will proceed carefully with interest rate cuts in 2024.
He iterated again, “We just want some more confidence before we take that very important step of beginning to cut interest rates”, which is reasonable.
Mr Powell warned that although, the monetary policy tightening would cause “some pain.” However, “it really has not happened.
Will there be a window of opportunity for Mr Powell to “explain” himself on Tue, 06 Feb 2024 when he is due to speak at the Economic Club of Washington.
And just like that, it was a mixed trading day by the time 4pm comes around:
DJIA: -0.71% (-274.30 to 38,380.12)
S&P 500: -0.32% (-15.80 to 4,942.81).
Nasdaq: -0.20% (-31.28 to 15,597.68). Still above the 15k mark.
Heading into the 2nd trading day of the week, how will the US market fare today ?
Looking at the Composite indexes’ futures (for now), it looked a little promising but really do not count on it to remain status quo…. (see below)
Palantir - Q4 2023 earnings.
On a more positive note, I am curious to witness how $Palantir Technologies Inc.(PLTR)$ positive Q4 2023 earnings will impact:
The company stock when trading resumes, as the earnings were announced after market closed.
The US market overall for today and the week.
On Mon, 05 Feb 2024, Palantir reported its “better than expected” Q4 2023 earnings after the bell.
Full-year guidance for 2024 came roughly in line with Wall Street’s estimates:
Revenue: $608.4 Million vs. $602.4 million expected by LSEG (previously Refinitiv). This is a +20% gain YoY.
Earnings per share (EPS) : $0.80 cents adjusted vs. $0.08 cents expected by LSEG.
Palantir achieved GAAP profitability of $93.4 Million (+302% YoY) and it is the 5th consecutive quarter of profitability. This also represents a 15% margin. (see above)
Commercial success - accomplished.
One of the main critics hurled at Palantir is its reliance on US governmental contracts and is not commercially viable.
Looking at its commerical customer base “growth” (see above), I think Palantir has managed to silence its critics.
Each commercial customer’s contract is worth at least US$1 Million each.
In FY 2023, Palantir managed to grow its commercial customer base by +55%.
2024 Outlook.
In a letter to shareholders, Palantir CEO Alex Karp said:
Palantir’s expansion and growth “have never been greater,” especially as demand for large language models in the US “continues to be unrelenting.”
It has been rolling out its Artificial Intelligence Platform (AIP) and has carried out nearly 600 pilots with the technology in 2023 - in contrast to less than 100 pilots in 2022.
For Q1 2024, Palantir expects revenue to be between $612 Million and $616 Million.
For FY 2024, forecast revenue is expected to be between $2.65 Billion to $2.67 Billion.
Wall Street’s expectations is $617 Million (Q1 2024) and $2.66 Billion (FY 2024).
My viewpoints: (mine and mine only)
Palantir has a unique business solution, in that customization of its AI solution is key to its success in helping each organization to make sense of its unique and complex data set.
It is certainly good news to learn that Palantir is growing from strength to strength.
However, I do not think that it has the clout to affect US market sentiments yet.
With yet another stellar quarter earnings in the bag, I believe Palantir is able to lift its stock price out of the doldrum.
FYI, its pre-market price is already expected to rise +18.36% to $19.80 per share.
With Palantir reporting its fourth straight quarter of profitability, it is now eligible for inclusion in the S&P 500. Now this is “Great” news, agree?
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Great article. Something great insight into Palantir.
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