Topline
Palantir’s stock rose more than 8% to another intraday high Tuesday, after the software firm reported $1 billion in quarterly revenue for the first time while citing an “astonishing” impact from artificial intelligence.
Shares of Palantir surged 8% to around $173.70 as of around 11:10 a.m. EDT, paring back earlier gains after the stock set a new intraday record at $176.33.
A rally for Palantir comes after the company posted second-quarter earnings per share of $0.16 on Monday, a 77% increase over the same period last year and above estimates of $0.14 EPS, and revenue of just over $1 billion, well above analyst forecasts of $939.25 million and a 48% annual increase, according to a consensus by FactSet.
The company also raised its full-year revenue guidance to between $4.14 billion and $4.15 billion, above Wall Street’s consensus of $3.91 billion.
Palantir CEO Alex Karp said in a statement his firm’s second quarter was “phenomenal” and business has “accelerated rapidly,” adding Palantir continues to “see the astonishing impact of AI leverage.”
131%. That’s how much Palantir shares have increased this year, by far outperforming growth recorded by the S&P 500 (7.4%).
Palantir became one of the 20 largest U.S. companies as shares rallied again last week. The firm has a market valuation of about $411 billion as of Tuesday’s share price, ranking Palantir the 22nd-largest company globally.
The U.S. Army announced last week it would consolidate dozens of software contracts into an enterprise deal with Palantir, which will receive $10 billion over the next decade. WedBush Securities analyst Dan Ives said in a note Monday the deal is “one of the largest” software contracts by the Defense Department in U.S. history, adding Palantir continues to “generate unprecedented traction for its entire portfolio across the federal and commercial landscapes.”
Some economists have criticized Palantir’s growth and valuation this year, including Jefferies analyst Brent Thill, who argued the stock will likely underperform amid a disconnection between “valuation and achievable growth.” Before Palantir reported Q2 earnings, Rishi Jaluria, an analyst for RBC Capital Markets, wrote, “We cannot rationalize why Palantir is the most expensive name in our software coverage.” Jalulria noted at the time that unless Palantir reported a “substantial beat-and-raise quarter” in the near-term, the firm’s “valuation seems unsustainable.”
U.S. Army Pools Contracts Into Up To $10 Billion Palantir Deal (Reuters)