Palantir Technologies, a leading data analytics company, is predicting lucrative profits for the year 2024. The company’s shares rose more than 9% in extended trading after announcing a full-year profit forecast above Wall Street estimates. Palantir’s strong performance is driven by the surging demand for its artificial intelligence (AI) offerings, as businesses increasingly seek to build and deploy their own AI-backed solutions.
CEO Alex Karp sees AI as the “future” of the company, and their flagship product, the Artificial Intelligence Program, is in high demand. In the fourth quarter alone, Palantir signed 103 deals worth over $1 million each. The company’s U.S. commercial revenue in the last quarter of 2023 showed an impressive increase of 70% compared to the previous year, reaching $131 million. For the full year of 2024, Palantir expects its U.S. commercial revenue to exceed $640 million, projecting a minimum growth rate of 40%.
Despite these positive figures, growth in Palantir’s government segment, which contributed over half of the total fourth-quarter revenue, has slowed down. Government revenue only grew by 11% compared to a 23% increase in the same period the previous year. Analysts have pointed to the “lumpiness” of government contracts as a factor that can affect the recognition of revenue. However, Palantir recently entered into an agreement with the Israeli Defense Ministry, further expanding its footprint in the government sector.
On an adjusted basis, Palantir forecasts a profit between $834 million and $850 million for 2024, surpassing analyst estimates. The revenue forecast aligns with expectations, but the current-quarter revenue forecast falls below estimates. Palantir’s Chief Revenue Officer, Ryan Taylor, attributes this dip to seasonal weaknesses typically observed in the first three months of the year.
Palantir’s positive profit forecast speaks to the growing demand for AI solutions in various industries. As businesses seek to harness the power of AI to enhance their operations and decision-making processes, Palantir is positioning itself as a key player in providing these cutting-edge technologies. With the company’s track record of strong financial performance and a continued focus on innovation, Palantir is well-positioned to capitalize on the increasing demand for AI solutions in the coming years.
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