Palantir Technologies, a prominent data analytics software firm, is poised to announce its third-quarter financial results. Industry analysts are forecasting a robust performance, projecting a considerable surge in adjusted profit and overall revenue. The company, which has historically focused on governmental contracts, is now strategically broadening its reach into the commercial sector, leveraging its advanced generative AI capabilities. This expansion, coupled with its strong market position and political affiliations, has contributed to a notable appreciation in its stock value, despite its premium market valuation. The technical indicators for Palantir's stock continue to reflect a strong investor interest.
Investors are keenly awaiting Palantir's third-quarter earnings report, which is expected to reveal an adjusted profit of 17 cents per share, marking a 68% increase from the previous year. Revenue projections stand at an impressive $1.092 billion, representing a 50% year-over-year growth. The company has demonstrated consistent revenue acceleration over the past four quarters, moving from 30% to 48%. A significant portion of this growth is attributed to a projected 46% increase in government revenue, reaching $469 million, and an even more substantial 90% growth in U.S. commercial revenue, totaling $347 million.
Beyond the raw numbers, market observers will be scrutinizing management's commentary regarding its European market performance, where business trends appear to be on an upward trajectory. Additionally, there is speculation about a potential stock split, a move that could impact investor accessibility and market perception. Tyler Radke, an analyst at Citi, expressed optimism about the third-quarter results but cautioned about future guidance, anticipating a more modest increase compared to the previous quarter's significant upward revision. However, Radke highlighted positive feedback from partners like Oracle and Snowflake, indicating an increase in collaborative deals and a strong return to growth in federal government contracts.
Palantir's strategic shift towards generative AI is a key driver of its commercial growth. While its origins lie in predictive AI for government intelligence and counterterrorism, the company is now adapting its products to leverage advanced reasoning models for novel outputs. This transition is particularly aimed at expanding its footprint in critical commercial sectors such as healthcare and financial services. The company's recent Artificial Intelligence Platform Conference (AIPCon) showcased real-world applications of its AI technology, underscoring its commitment to innovation and market expansion. Furthermore, Palantir's connections within the Trump administration, including co-founder Peter Thiel and advisor David Sacks, are seen as advantageous, particularly in securing U.S. government contracts. The company is also viewed as a strong contender for the "Golden Dome" air and missile defense project, though it faces competition from industry giants like Lockheed Martin.
From a technical standpoint, Palantir's stock has shown remarkable growth, surging by 340% in 2024, with a significant portion of this gain occurring after Donald Trump's presidential election victory. The stock currently holds an Accumulation/Distribution Rating of C-plus, indicating a neutral sentiment regarding institutional buying and selling. Notably, Palantir boasts a Composite Rating of 99 out of a possible 99, as per IBD Stock Check-up, a benchmark for top-performing growth stocks. The stock's 21-day Average True Range (ATR) of 4.48 suggests a moderate level of price volatility, staying within IBD's recommended range of up to 8% for stocks, making it an interesting prospect for investors navigating current market conditions.