Palantir Technologies (PLTR) delivered second-quarter earnings that topped estimates while revenue handily beat Wall Street targets. Palantir stock jumped as September quarter guidance came in well above expectations amid a market rotation out of the technology sector, especially artificial intelligence plays.
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The software maker reported earnings after the market close. On the stock market today, Palantir stock surged 15.4% to near 28 in extended hours trading, after falling 2.6% in regular trading. Technology stocks sold off again on Monday, with the Nasdaq composite retreating 3.4%.
For the quarter ended June 30, Palantir earnings using generally accepted accounting principles, or GAAP, were 9 cents a share, up 80% from a year earlier. Revenue rose 27% to $678 million, the software maker said.
Analysts had predicted Palantir earnings of 8 cents a share on revenue of $653 million.
Palantir Stock: U.S. Commercial Growth Key
Denver-based Palantir said government revenue rose 23% to $371 million, topping estimates of $349 million in sales. In addition, commercial revenue rose 33% to $307 million, topping estimates of $306 million. Further, U.S. commercial revenue jumped 55% to $159 million.
In a letter to shareholders, Chief Executive Alex Karp said: “In Q2 2024, we generated $159 million in revenue in the U.S. commercial market alone, an increase of 55% from the same period the year before. The growth rate was even more significant, at 70% year-over-year, when excluding strategic commercial contracts. And the persistent and unbridled demand for our software, for an effective enterprise platform that makes artificial intelligence capabilities useful to large institutions, shows no sign of relenting.”
For the current quarter ending in September, Palantir says it expects revenue in a range of $697 million to $701 million. Analysts had predicted sales of $681 million.
Also, Palantir hiked 2024 revenue guidance by roughly 2% to between $2.742 billion and $2.750 billion.
Among AI Stocks To Watch
Heading into the Palantir earnings report, shares were up 40% in 2024. Palantir stock hit a 52-week high of 29.83 on July 18. Further, Palantir stock has outperformed since 2023 amid buzz over generative artificial intelligence technology.
Also, Palantir rolled out its “Artificial Intelligence Platform” in early 2023. Palantir is among AI stocks to watch.
Meanwhile, big cap tech Magnificent 7 stocks have pulled back as investors question how long AI investments will take to pay off.
Palantir has already mined the AI opportunity with government customers for intelligence gathering, counterterrorism and military purposes. Now Palantir aims to use generative AI to spur growth in the commercial market. The software maker has expanded into health care, energy and manufacturing.
William Blair analyst Louie DiPalma said in a report that Palantir did not disclose how much Q2 came from special-purpose acquisition companies.
“The company previously guided for revenue from SPAC customers of between $7 million and $9 million,” he said. “SPAC revenue upside may have played a role in U.S. commercial revenue accelerating.”
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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