AI Revolution Drives Palantir’s Earnings Surge
Government Spending Fuels Growth
Palantir’s stock soared over 20% on Tuesday, driven by its impressive third-quarter earnings report. The company’s AI technology saw a significant boost in spending from the US government, with global government revenue rising 40% year-over-year to $408 million. This accounted for 56% of Palantir’s total revenue, surpassing expectations.
US Government Business Sees Strongest Growth in 15 Quarters
Palantir’s chief revenue and legal officer, Ryan Taylor, attributed the growth to the company’s Department of Defense (DoD) business, which saw a 21% quarter-over-quarter increase. Taylor emphasized that “the AI revolution is underway now,” and that the gap between AI leaders and laggards is rapidly widening.
Commercial Revenue Falls Short of Expectations
While Palantir’s government business thrived, its commercial revenue fell short of expectations, reaching $317 million. The company cited a decline in revenue from a government-sponsored enterprise in the Middle East as a contributing factor.
Adjusted Earnings Per Share Beat Expectations
Palantir reported adjusted earnings per share of $0.10, a penny above expectations, on revenue of $725.5 million, which exceeded Wall Street estimates.
Analysts Remain Skeptical Despite Strong Performance
Despite Palantir’s impressive earnings report, Wall Street analysts remain cautious, with many predicting a decline in shares over the next year. Deutsche Bank analyst Brad Zelnick noted that while Palantir is among the few companies successfully monetizing generative AI, the stock’s surge has been fueled by broader AI trends and government interest in AI war technologies.
CEO Alex Karp Addresses Doubters
In a defiant tone, Palantir’s CEO and co-founder Alex Karp dismissed skeptics, stating that most people in tech innovation now view Palantir as an ally, and that the company’s products are the best. Karp also reiterated Palantir’s commitment to supporting the US military and its allies.
Controversy Surrounds Palantir’s Partnerships and AI War Tech
Palantir has faced backlash for its partnerships with government agencies, including Immigration and Customs Enforcement (ICE) and the Israeli Defense Force (IDF). Karp’s comments on the Middle East have sparked criticism, and some employees have left the company due to its role as a supplier of AI war tech to the IDF.
Leave a Reply