The company is one of the biggest stock market winners in the generative sector AI boomwhich has more than doubled in value this year – a rally that has raised concerns about its high valuation.
But Palantir’s results Monday evening assuaged some of those fears as demand surged for its AI platform, used to test, debug code and evaluate AI-related scenarios, as well as its services. intended for the government that include software to visualize army positions. .
Palantir raised its revenue forecast to between $2.805 billion and $2.809 billion for 2024, up from its previous projected range of $2.742 billion to $2.750 billion.
In the third quarter, the company saw revenue from U.S. government contracts increase 40%, accounting for more than 44% of its total revenue of $725.5 million.
“We expect a long period of growth in the government sector, driven by massive demand for AI-driven solutions in government functions such as the military and healthcare,” Morningstar analysts said.
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But analysts have warned that the stock’s recent rise in value means that “any bumps in the road, such as sales execution issues or weaker-than-expected revenue growth or guidance, could affect significantly the valuation of the stock”. If pre-market gains continue throughout the day, Palantir is expected to add $12 billion to its market value.
It trades at a forward price-to-earnings ratio of 95.43, compared to 25.60 for its peers. Oracle and 126.92 for Snowflake.
Palantir stock has outperformed the S&P 500 index this year. It was added to the benchmark index at the end of September.
