Palantir Shares Soar 30% After Revenue Beat and Strong AI Demand
Shares of Palantir surged after the company reported strong demand for its AI offerings in its fourth-quarter earnings.
Palantir Beats Expectations with Strong AI Demand
Shares of Palantir closed up over 30% on Tuesday following the release of its fourth-quarter earnings. The company reported that revenue in the quarter increased 20%, surpassing Wall Street's expectations. Palantir also highlighted the strong demand for its artificial intelligence offerings, particularly large language models.
In a letter to shareholders, CEO Alex Karp stated that the demand for large language models in the U.S. remains high. Palantir has been scaling its Artificial Intelligence Platform (AIP) and conducted nearly 600 pilots with the technology last year.
Analysts at Citi upgraded Palantir shares to neutral from sell and raised their target price, citing the company's breakthrough momentum in its commercial unit. Jefferies analysts also upgraded the stock, acknowledging the impressive quarter led by commercial growth in the U.S. However, concerns about Palantir's valuation remain.
Positive Outlook for Palantir
Bank of America analysts reiterated their buy rating on Palantir shares and expressed optimism about the company's future. They believe that Palantir's AI platform is already impacting the company in a meaningful way and expect its momentum with AI to continue. The analysts also see significant opportunities for Palantir's software within the U.S. government.
While acknowledging the strong performance, Jefferies analysts still have reservations about Palantir's valuation. The analysts had previously downgraded the stock but now recognize that the company is at an inflection point with its AI platform.
Overall, Palantir's fourth-quarter earnings and the strong demand for its AI offerings have bolstered the company's outlook, leading several analysts to upgrade their ratings on the stock.
