Earnings Surprise in Q3 Driven by AI Boom
Upgraded Q4 Outlook on Strong AI Demand
Palantir, an artificial intelligence (AI) data analytics company, announced on November 4 (local time) that its revenue for the third quarter of this year reached $1.18 billion, with earnings per share (EPS) of $0.21. The revenue surpassed the market forecast of $1.09 billion compiled by market research firm LSEG, and the EPS also exceeded the expected $0.17.
Despite the ongoing partial shutdown of the U.S. federal government, Palantir projected that its growth momentum would continue into the fourth quarter.
Palantir's revenue outlook for the fourth quarter was presented in the range of $1.327 billion to $1.331 billion, which is higher than the market consensus of $1.19 billion.
According to Bloomberg News, Wall Street analysts have assessed Palantir's stock as being excessively overvalued relative to its fundamentals. Matt Maley, Chief Market Strategist at Miller Tabak Plus Co., stated, "When the music stops, this stock will take a bigger hit than others," adding, "For now, other, cheaper AI-related stocks appear to be safer."
Alex Karp, Chief Executive Officer, addressed some of the concerns raised in a public letter to shareholders, describing critics as "detractors mired in self-destructive confusion."
CEO Karp emphasized, "This rally has confounded financial analysts and chatterboxes alike because their frameworks did not anticipate that a company of this scale could grow so aggressively and relentlessly. Palantir has enabled ordinary investors to achieve returns once enjoyed only by Silicon Valley venture capitalists, and this has been accomplished through genuine and substantial growth."
Following the earnings release, Palantir's share price was trading at $208.5 in after-hours trading as of 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time), up more than 3% from the closing price.
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