Palantir Soars More Than 20 Percent on Earnings Beat, Strong Outlook

February 4, 2025 TruthUSA

Palantir Technologies Inc. shares soared more than 26 percent during the morning session on Feb. 4 after the company reported stronger-than-expected revenue and upbeat guidance a day earlier. It also said it is deepening its position at the center of the shift to artificial intelligence (AI).

On Feb 3, the Denver-based builder of software platforms for the intelligence community reported a 52 percent jump in U.S. revenue in the fourth quarter of 2024 from a year earlier, and a 12 percent increase from the previous quarter, reaching $558 million.

U.S. commercial revenues led the gains, up 64 percent for the year and 20 percent for the quarter, followed by strong gains in the U.S. government segment. In addition, the company gave upbeat guidance for the first quarter of 2025.

The company’s shares jumped more than 26 percent as of 11: 30 a.m. ET on Feb 4. It has risen more than 521 percent over the past year.

According to Palantir CEO Alexander C. Karp, the company is deepening its position at the center of the AI expansion.

“Our business results continue to astound, demonstrating our deepening position at the center of the AI revolution,” he said in a comment following the company’s earnings release. “Our early insights surrounding the commoditization of large language models have evolved from theory to fact.”

However, he said that the company’s AI expansion is still in its early stages, which could stretch over years and decades.

“This is still only the beginning,” Karp wrote to stockholders. “The growth of our business is accelerating, and our financial performance is exceeding expectations as we meet an unwavering demand for the most advanced artificial intelligence technologies from our U.S. government and commercial customers.”

Sidharth Ramsinghaney, director of strategy and operations with Twilio, sees Palantir’s results in the fourth quarter as a validation that enterprise AI has moved from experimental to mission-critical. In particular, the strong growth in U.S. commercial revenue confirms that major enterprises are now comfortable putting AI directly into their operational workflows.

However, he thinks the most compelling story about Palantir’s financial report isn’t the numbers but the successful transformation of the company’s business model.

“They’ve managed to maintain their government business strength while building a commercial growth engine that’s now outpacing the core,” Ramsinghaney told The Epoch Times via email. “That’s remarkably difficult to execute in enterprise software.”

Meanwhile, Ramsinghaney sees this transformation as strengthening the company’s competitive advantage, as evidenced by the rapid expansion in customer numbers, which jumped to 711 from 497 a year earlier.

“This isn’t just adding logos; these are large-scale deployments across major institutions,” he said. “They’re showing that you can drive aggressive growth while significantly improving profitability—that’s the holy grail in enterprise software, and very few companies execute it successfully.”

As for the sustainability of the company’s growth, Ramsinghaney believes the company’s guidance for 54 percent U.S. commercial growth in 2025 is bold. However, with a $5.2 billion cash position and zero debt, the company has the resources to invest aggressively in market expansion.

“The key metric to watch will be their ability to maintain the 63 percent adjusted free cash flow margin while funding this growth,” he said.

Moreover, he sees broad applications for the AI industry in Palantir’s solid financial report and upbeat guidance.

“This quarter sets a new benchmark for AI platform companies,” he said. “The combination of accelerating commercial growth, expanding margins, and strong cash generation suggests we’re entering a new phase of enterprise AI adoption—one where operational platforms become as fundamental as cloud infrastructure.”

Source link