AI Revolution Powering Palantir Technologies to 25% Gains

Shares of Palantir Technologies (PLTR) were up 22% in midday trading Tuesday after reporting earnings following the market's close yesterday.

The AI-powered data analytics firm recorded 36% growth in revenue as sales hit $878 million, far exceeding Wall Street's expectations of $776 million. U.S. revenue growth accelerated 52% from the year-ago period as commercial revenue rocketed 64% on a 43% increase in the number of customers served.

Profits also beat analyst forecasts as Palantir turned in adjusted EPS of $0.14 compared to the $0.11 per share consensus outlook.

The numbers also exceeded management's own expectations as it had guided revenue to a range of $767 million to $771 million. Palantir doesn't provide earnings guidance.

As CEO Alex Karp expressed in his shareholder letter, "We are still in the earliest stages, the beginning of the first act, of a revolution that will play out over years and decades." Palantir seems firmly enmeshed in this revolution.

Wall Street, though, hasn't expected much from the AI data analytics shop. The 21 analysts covering PLTR stock had a sell rating on it and their one-year price target assumed shares will fall almost 40%.

They will need to reassess their view of its prospects as Palantir trounced their view due to the ongoing AI tsunami. It was an across-the-board sweep for the company as even its government business jumped 45% in the quarter.

While Palantir's Q4 report was filled mostly with superlatives, if there was a sore spot it was in international markets where revenue only rose 3%. European companies are adopting a go-slow approach with artificial intelligence, which is creating some headwinds in establishing a significant footprint there.

Karp, however, called out “untamed organic growth” in demand for its artificial intelligence software.

That will drive sales higher in the immediate future as Palantir Technologies offered up Q1 revenue guidance of between $858 million to $862 million. which implies a 36% increase at the midpoint.

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