Palantir Technologies’ second quarter earnings a ‘validation moment’ for its AI story
Published: 16:01 06 Aug 2024 EDT
Written by: Emily Jarvie
Analysts at Wedbush have raised their price target on Palantir Technologies Inc (NYSE:PLTR) as its latest quarterly results have proven to be a “validation moment for the Palantir AI story.”
For the second quarter, Palantir delivered strong beats across the top and bottom lines driven by demand for its AI solutions from commercial and government customers, the analysts highlighted.
“Total revenue came in at $678.1 million up 27% year-over-year and 7% quarter-over-quarter which was well above the Street’s $653.2 million as US commercial saw 70% year-over-year growth excluding strategic contracts with Palantir seeing unprecedented demand for Artificial Intelligence Platform (AIP) driving new customer conversions and existing deal expansions,” they wrote in a note to clients.
“Total deals above $1 million came in at 96 (up 45% year-over-year and 10% quarter-over-quarter) while seeing deals of at least $10 million of 27 (up 50% year-over-year) with the US commercial deal count nearly doubling year-over-year as the company’s bootcamps remain a key part of its go-to-market strategy with users seeing the value Palantir brings to the table with high-value enterprise AI use cases.”
Palantir also increased its full year revenue and operating income guidance for the second time this year, with the analysts seeing a “solid opportunity ahead” for the firm to gain market share.
Total revenue for the full year is forecast to be between $2.742 billion to $2.750 billion, compared to the Street’s $2.7 billion estimate, with US commercial expected to grow at least 47%, from earlier guidance of 45%.
Palantir forecast operating income to be in the range of $966 to $974 million, above the Street estimate of $889.6 million.
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The Wedbush analysts upped their price target on Palantir to $38 from $35 and maintained their ‘Outperform’ rating.
Shares of Palantir traded up more than 10% at about $27 late afternoon on Tuesday.
“This was a game changer quarter for the Palantir story as the AIP monetization piece on US commercial was front and center as a major growth driver,” analysts concluded.