Palantir Raises 2024 Revenue Forecast Amid Rising Demand for Artificial Intelligence

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Palantir Raises 2024 Revenue Forecast Amid Rising Demand for Artificial Intelligence

Palantir Technologies Inc. (NYSE:PLTR) announced today that it has upwardly revised its 2024 revenue forecast for the third time. This adjustment reflects the company's expectation that strong demand for artificial intelligence (AI) software will continue from both government and business sectors.

Following the news, Palantir shares rose by approximately 8% in extended trading hours. The data analytics company observed an increase in interest in its GenAI technology platform, which is used for tasks such as testing, debugging code, and evaluating AI scenarios. The revised revenue forecast now ranges between $2.805 billion and $2.809 billion, up from the previous range of $2.742 billion to $2.750 billion.

Palantir's financial performance remains robust; its stock price has risen by over 140% this year, significantly outpacing the S&P 500's 20% gain. The company's inclusion in the S&P 500 in September coincided with this notable market performance.

In addition to the revenue forecast, the company has also raised its adjusted operating income projection for the year, now estimating it to be between $1.05 billion and $1.06 billion. This figure is up from the earlier estimate of $966 million to $974 million. David Glazer, the company's Chief Financial Officer, attributed the growth in top-line revenue to increased demand for AI, which positively impacts the bottom line.

A significant portion of Palantir's revenue comes from government contracts. In the third quarter, the company reported a 40% increase in U.S. government revenue, which accounted for over 44% of its total sales of $725.5 million. These figures surpassed the average revenue expectation of $701.1 million, compiled by LSEG.

Moreover, in the third quarter, Palantir reached its highest profit to date, with a net income of $144 million, as noted in a letter to shareholders from CEO Alex Karp.

Despite its financial successes, Palantir experienced a setback last month when Storebrand Asset Management, one of the largest investors in the Nordic region, exited its investment in Palantir due to concerns over the company’s work in Israel and potential risks of violating international humanitarian law and human rights.

Looking ahead, Palantir also anticipates that its fourth-quarter revenue will exceed expectations, signaling continued positive momentum for the company.