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Palantir Technologies announced a 13 percent increase in Q2 2023 revenue to $533 million and also reported its third consecutive quarter of GAAP profitability.
American big data analytics holding company Palantir Technologies Inc (NYSE: PLTR) shares closed Monday trading at $17.99, down 1.15 percent from the day’s opening price. However, the PLTR shares gained approximately 2.67 percent during the after-hours to trade at about $18.47. The sudden gain in Palantir Technologies stock was attributed to the Q2 2023 earnings results that narrowly met analysts’ expectations. Notably, the company announced adjusted earnings per share of about 5 cents versus 5 cents expected by analysts surveyed by Refinitiv. Additionally, Palantir Technologies announced revenue of $533 million versus the $533 million expected by analysts according to a survey conducted by Refinitiv.
Amid the Artificial Intelligence (AI) hype, Palantir CEO Alex Karp told shareholders through a letter that it released the Artificial Intelligence Platform (AIP), which allows large language models to operate within the confines of the enterprise and on privately held data. Reportedly, the AIP has users across more than one hundred organizations, including some of the largest enterprises in the world from the healthcare, finance, automotive, and energy sectors.
“The demand for AIP is unlike anything we have seen in the past twenty years. We are currently in discussions with more than three hundred additional enterprises to deploy AIP within their organizations, all of which are searching for an effective and secure means of adapting the latest large language models for use on their internal systems and proprietary data,” Karp noted in the letter.
Palantir Technologies in Q2 2023
During the second quarter that ended on June 30, 2023, Palantir Technologies reported a net income of about $28 million, which represented 1 cent per share, compared to a net loss of approximately $179 million or about 9 cents per share during the same quarter a year ago. Having reported almost a year of profitability, the company anticipates being included in the S&P 500, more so after it reports its third-quarter earnings in November.
Moreover, the company anticipates reporting revenue of between $553 million and $557 million during the third quarter, ahead of the $552 million expected by analysts. Notably, the company announced that it expects the third quarter’s adjusted income from operations to come in between $135 million and $139 million.
Ultimately, Palantir Technologies expects to report full-year revenue of over $2.212 billion, whereas analysts surveyed by Refinitiv expected $2.209 billion. Additionally, the company lifted its forecast for adjusted income from operations for the full year to more than $576 million, compared with a range of $506 million to $556 million in May.
During the first half of the year, the company announced a revenue of about $1.1 billion, thus managed to conduct a share buyback program of up to $1 billion.
Market analysts praised Palantir for their efforts in building an unprecedented AI fortress with the CEO calling for increased collaboration between the tech sector and the government.
On Monday, July 31st, shares of Palantir Technologies Inc (NYSE: PLTR) surged by a staggering 11% as the company decided to tap into investors’ expectations for its artificial intelligence software, just before its earnings report in the upcoming week. Palantir, a data analytics company known for working with the US government, provides AI-powered services to different organizations.
The CEO, Alex Karp, mentioned a high demand for their new AI platform, leading to a significant increase in the company’s shares this year. Since the beginning of 2023, the PLTR stock price is already up by more than 200%.
As of Monday’s closing, the PLTR stock price was trading 11.40% up at a price of $19.84. Wedbush analysts have given an outperform rating to PLTR stock with a target price of $25.
William Blair analysts also raised their second-quarter revenue estimates for Palantir from $529 million to $551 million. They believe the company will see a boost from its SPAC customers, even those that have declared bankruptcy. The analysts noted that SPACs had a positive impact on the first-quarter earnings, and they anticipate this trend to continue in the second quarter.
Palantir Riding the AI Wave
Market analysts are also betting on the AI development undertaken by Palantir. During an interview on CNBC’s “The Exchange,” Dan Ives, managing director of equity research at Wedbush Securities, compared Palantir to the soccer star Lionel Messi, calling it “the Messi of AI.”
He expressed confidence in the company’s ability to monetize its AI capabilities, describing Palantir as having built an unparalleled AI fortress. In a note, the Wedbush analyst wrote:
“We believe PLTR will capitalize on the expansion of new use cases over the next 6-12 months given its large partner ecosystem and extensive product capabilities, by servicing the rapidly increasing demand for enterprise-scale generative artificial intelligence”.
Palantir CEO Alex Karp also acknowledged the frenzy surrounding AI as well as the technological risks that it brings along. In an opinion piece published by the New York Times, Karp called for increased collaboration between the tech sector and the government.
Karp said that that attention should be “urgently directed at building the technical architecture and regulatory framework that would construct moats and guardrails around AI”. However, he argued against any slowdown in the tech research and innovation that a few leaders have called for. The Palantir CEO said that if the US doesn’t invest in AI, other nations will certainly do it.
“This is an arms race of a different kind, and it has begun,” Karp wrote. Later, he added that “the ability of free and democratic societies to prevail requires something more than moral appeal. It requires hard power, and hard power in this century will be built on software.”
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.