Palantir Technologies on Monday raised its annual revenue forecast for the second time this year, expecting robust demand for its AI-linked services from businesses and governments, sending its shares up 5% in extended trading.
Initially backed by the CIA, the company has capitalized on its expertise in managing and analyzing data to help train and run new artificial intelligence apps using its platforms.
The data analytics and defense software firm projected revenue in the range of $4.14 billion to $4.15 billion for 2025, up from its earlier forecast of between $3.89 billion and $3.90 billion.
The raised forecast is also above analysts’ average estimate of $3.90 billion, according to data compiled by LSEG.
“Palantir is continuing to exceed increasingly high expectations,” said Gil Luria, an analyst at D.A. Davidson who has a “neutral” rating on the stock.
“The only way to describe their trajectory is: parabolic.”
Palantir’s shares have more than doubled in value this year, far outpacing the 6% gain for the benchmark S&P 500, as investors bet on its ability to benefit from the proliferation of AI technology and government spending on defense tech.
The company, co-founded by tech billionaire Peter Thiel, said it expects revenue derived from U.S. businesses to come in above $1.30 billion, up from its earlier guidance of more than $1.18 billion.
This business is closely watched as Palantir works to cut its reliance on government contracts.
Sales to the US government jumped 53% to $426 million, representing more than 42% of total second-quarter revenue of about $1 billion, which beat estimates. Second-quarter adjusted earnings of 16 cents per share beat estimates of 14 cents.
“They have accelerants on both sides (commercial and government)” Luria said.
“On the government side, their capabilities have gotten to a point where they can be the lead contractor on increasingly large projects.”
Last week, the US Army said it might purchase services of up to $10 billion from Palantir over a decade.
The company also forecast third-quarter sales above estimates.
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