Palantir (NASDAQ:PLTR) stock rose 15% overnight after earnings topped estimates.
The artificial intelligence (AI) software company said it earned $71.5 million, 7 cents per share fully diluted, on revenue of $558 million during the quarter. It also raised its full-year estimates to $607-$611 million of earnings on $2.21-$2.22 billion of revenue.
Palantir opened this morning at about $17.45 per share, a market capitalization of $36.8 billion.
Winning at War
War may be bad for the economy, but it’s good for those waging it.
Palantir, which made government contracts, particularly with the military, a key part of its strategy, is now reaping the benefits. The company’s data analytics delivers actionable results in easy-to-understand formats. That is the promise of artificial intelligence. When the AI boom started early in 2023, Palantir was among the first to claim the title.
Palantir is frank about its war strategy. Co-founder Jon Lonsdale recently said about Israel: “We’re trying to keep the good guys armed and ahead.” Palantir, which has contracts with the CIA, has also been involved in Ukraine. Its efforts are changing how wars are fought.
Through 2023, Palantir stock has consistently sold for over 15 times the company’s annual revenue, even though it has only begun to show a profit. Wedbush analyst Dan Ives has supported the run and helped boost the stock. Some analysts, however, remain cautious, with six of the 15 at Tipranks telling clients to sell. Their price target of $13.88 is well below Palantir’s current price.
I have been skeptical of Palantir. I continue looking for signs of growth in civilian sectors and among corporate clients.
PLTR Stock: What Happens Next?
Palantir is still growing at just 17% per year, according to its earnings release. The risk is that today’s wars could turn out like the Covid-19 pandemic did for Pfizer (NYSE:PFE), a boost that fades with the crisis.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
