The brand of U.S. software program firm Palantir Applied sciences is seen in Davos, Switzerland Januar 22, 2020.
Arnd Wiegmann | Reuters
Shares of Palantir popped greater than 25% Tuesday, a day after the corporate launched fourth-quarter earnings that surpassed analysts’ expectations for income and confirmed robust demand for its synthetic intelligence choices.
Palantir, recognized for its protection and intelligence work with the U.S. authorities, reported that income within the quarter elevated 20% to $608.4 million, up from the $602.4 million anticipated by Wall Avenue. Palantir mentioned it expects to report between $612 million and $616 million in income throughout its first quarter, shy of the $617 million analysts had been anticipating.
In a letter to shareholders, CEO Alex Karp mentioned demand for big language fashions within the U.S. “continues to be unrelenting.” Palantir has been scaling its Synthetic Intelligence Platform, or AIP, and Karp mentioned the corporate carried out practically 600 pilots with the expertise final yr.
Analysts at Citi upgraded Palantir shares to impartial from promote and raised their goal value from $10 to $20. They mentioned Palantir delivered a “stronger-than-expected” fourth quarter pushed by “breakthrough momentum” within the firm’s business unit, however they nonetheless have some reservations about its conservative full-year steerage for its non-U.S. business sectors.
“We see these dangers balanced by potential name choices on new AI Monetization (AIP) and enhancing U.S. Authorities contracts into 2024,” the analysts wrote in a notice Tuesday.
Jefferies analysts additionally upgraded the inventory and mentioned Palantir delivered an “spectacular” quarter led partly by its business progress within the U.S.
Jefferies analysts mentioned they’d downgraded shares of Palantir at first of the yr as a result of they believed it might take time for its AI platform to have an actual influence, however now, they assume the corporate is at an “inflection level.”
“We’re impressed with AI Platform (AIP) ramping quicker than our preliminary expectations and imagine it is applicable to improve shares to mirror the momentum,” the analysts wrote in a Tuesday notice. “We had been mistaken, however we’re not cussed.”
Nonetheless, the Jefferies analysts mentioned they nonetheless have some considerations about Palantir’s valuation since shares are buying and selling at a “23% premium to the big cap common,” so the analysts will “stay on the sidelines.”
Financial institution of America analysts reiterated their purchase score on the inventory and mentioned that whereas AIP remains to be in its early days, it’s already impacting the corporate in a “significant means.” The analysts mentioned they count on Palantir’s momentum with AI to proceed, and so they additionally see “vital alternatives” for the corporate’s software program inside the U.S. authorities.
“We expect this exceptional progress is an indication of Palantir’s distinctive place as an enabler of AI-powered data-driven decision-making in a tangible, accessible, and operational means,” the analysts wrote Tuesday.
CNBC’s Michael Bloom contributed to this report.
