The Stock of Palantir Surges as AI Creates Further Growth Acceleration

Palantir Technologies Inc. reported accelerated growth for the latest quarter on Monday, largely powered by its artificial intelligence (AI) offerings. While many in Wall Street remain skeptical about the tangible financial impact of AI on software companies, Palantir’s stock tells a different story. The company’s shares have soared nearly 150% in 2024, reflecting investor confidence in Palantir’s AI-focused strategies.

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Following its recent earnings announcement, Palantir’s momentum appears to be holding strong, as the stock surged nearly 14% in after-hours trading.

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Palantir CEO Alex Karp remarked that the latest results challenge those who think AI’s value lies only in creating large language models. The company achieved revenue of $726 million for the third quarter, marking a 30% year-over-year increase and surpassing analysts’ expectations, which averaged $705 million, according to TradeAlgo.

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Palantir’s revenue growth has steadily picked up since Q2 of 2023—a trend Karp emphasized as a result of hard work and confidence in their long-term vision, as noted in his letter to shareholders.

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A significant driver of this growth is Palantir’s U.S. operations, which outpaced the company’s overall performance with a 44% revenue increase over the past year. U.S. commercial sales grew by 54%, while government-related revenue climbed 40%. “We delivered exceptional results this quarter, thanks to an unrelenting demand for AI that shows no signs of slowing down,” Karp commented in his shareholder letter, calling the surge a U.S.-driven AI transformation.

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Chief Revenue Officer Ryan Taylor elaborated on the reach of Palantir’s AI platform, highlighting its positive effects across various sectors. He provided an example of an insurance firm that, with Palantir’s AI, was able to reduce its underwriting process from two weeks to just three hours.

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Looking ahead, Palantir forecasts fourth-quarter revenue between $767 million and $771 million, surpassing the market consensus of $745 million. “We’re witnessing substantial results with our AI delivery,” Taylor affirmed.

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Palantir once again recorded a GAAP profit, reporting a net income of $144 million, or 6 cents per share—approximately twice the figure from a year ago. On an adjusted basis, the company’s earnings were 10 cents per share, slightly above analyst predictions.

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CFO David Glazer noted that Palantir’s underlying business economics are robust. Despite continued investment in the company through hiring and other strategic initiatives, Palantir remains profitable. Over the last year, the company has generated more than $1 billion in cash, he added.

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