Strong AI adoption drives Palantir’s revenue forecast up
Strong AI demand from government and business clients boosts Palantir’s revenue expectations.
Palantir Technologies raised its 2024 revenue forecast for a third time, attributing the surge to rising adoption of AI by government and corporate clients. The data analytics company now expects annual revenue between $2.805 billion and $2.809 billion, exceeding its previous outlook. Investor confidence has grown alongside the company’s strong performance in the AI sector, pushing shares up 13% in extended trading.
Government clients have continued to drive a substantial portion of Palantir’s revenue, with US government contracts alone increasing by 40% in the third quarter. These public sector contracts accounted for over 44% of the company’s third-quarter revenue, totalling $725.5 million and surpassing analyst expectations of $701.1 million. Palantir’s addition to the S&P 500 index and its stock’s 140% increase this year further highlight its impressive growth.
Despite its reliance on government contracts, Palantir’s commercial business is quickly gaining momentum. Industry analysts predict that its corporate sales, bolstered by the company’s AI solutions, may soon surpass government revenue. Palantir’s platform, used to test and debug code and evaluate AI scenarios, is attracting clients who appreciate the flexibility and quick turnaround for software decisions in the commercial sector.
Palantir’s revised forecast also included a rise in its adjusted income from operations to between $1.05 billion and $1.06 billion. Company executives highlighted that revenue growth is now feeding into bottom-line performance, reflecting the increasing demand for AI solutions across sectors. The company’s outlook for the fourth quarter remains strong, with revenue expected to exceed analysts’ projections.
