Palantir raises 2024 revenue forecast again on robust AI adoption; shares surge

PALANTIR Technologies on Monday (Nov 4) raised its annual revenue forecast for the third time, betting on strong spending from governments and rising demand for its software services from businesses looking to adopt generative artificial intelligence (AI) technology.

Shares of the company rose about 8 per cent in extended trading.

The data analytics company has benefited from a boom in GenAI technology, as more companies turn to its AI platform, which is used to test, debug code and evaluate AI-related scenarios.

The company now expects 2024 revenue in a range of US$2.805 billion to US$2.809 billion, up from its prior expectation of US$2.742 billion to US$2.75 billion.

The company is among the largest beneficiaries of a rally in AI-linked stocks, with its shares up more than 140 per cent so far this year. It was added to the S&P 500 in September and has outperformed the index’s 20 per cent year-to-date gain.

It also raised its annual forecast range for adjusted income from operations to between about US$1.05 billion and US$1.06 billion. It earlier forecast US$966 million to US$974 million.

“Top line growth, which is driven by the demand for AI, (is) flowing through to the bottom line,” CFO David Glazer said.

While businesses are increasingly using Palantir’s services, a large chunk of its revenue comes from government spending.

Palantir, whose services include providing software to governments that visualises army positions, posted a 40 per cent rise in US government revenue in the third quarter, which made up more than 44 per cent of total sales of US$725.5 million.

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Analysts on average had expected revenue of US$701.1 million, according to data compiled by LSEG.

Palantir also recorded its largest-ever profit, with net income of US$144 million in the third quarter, CEO Alex Karp said in a letter to shareholders.

One of the Nordic region’s largest investors, Storebrand Asset Management, said last month it sold its Palantir holdings due to concerns that the company’s work for Israel might put it at risk of violating international humanitarian law and human rights.

The company also forecast fourth-quarter revenue above estimates. REUTERS