Palantir Technologies' quarterly results and enhanced full-year guidance demonstrate the growing adoption of its Artificial Intelligence Platform (AIP), as stated by Wedbush Securities on Tuesday. The software developer reported third-quarter adjusted earnings of $0.10 per share with revenue reaching $725.5 million, both of which exceeded Wall Street expectations.
The revenue for its US commercial sector surged by 54% year over year. The company continues to experience "unprecedented" demand, with AIP spurring new customer acquisitions and expansions of existing deals, as highlighted by Palantir's Chief Financial Officer David Glazer during an earnings conference call late Monday, referenced in a Capital IQ transcript.
Specifically, third-quarter trailing 12-month revenue from Palantir's top 20 clients increased by 12% annually to $60 million per customer, as outlined by Glazer. "This was a remarkable quarter for the Messi of AI growth narrative as AIP garners unparalleled demand, with more enterprises acknowledging the comprehensive value of Palantir's product suite, along with an influx of AI use cases emerging," said Wedbush analysts, including Daniel Ives, in a Tuesday communication to clients. On Tuesday afternoon, Palantir's shares soared by 22%.
The stock has appreciated by an impressive 194% in value year-to-date. In the third quarter, Palantir finalized 104 contracts exceeding $1 million each. "The evolving deal cycle as we transition customers from prototype to production is significantly enhancing the expansion of our US commercial business, which continues to gain momentum driven by AIP, both in terms of expansions and new client acquisitions," remarked Chief Revenue and Legal Officer Ryan Taylor during the call. In the US commercial sector, the company closed approximately $300 million in total contract value, while the customer count soared by 77% year over year, in contrast to a 37% growth rate in the previous year, according to Taylor. Looking ahead to 2024, Palantir has raised its revenue forecast to between $2.805 billion and $2.809 billion from the previous range of $2.74 billion to $2.75 billion.
Additionally, the company raised its guidance for adjusted operating income to a range of $1.054 billion to $1.058 billion from $966 million to $974 million. Palantir's revised outlook aligns with its ongoing strategy to capture opportunities in the expanding enterprise AI market, as noted by Wedbush.
The brokerage adjusted its price target on the company's stock to $57 from $45, while maintaining its outperform rating. The new target underscores Wedbush's optimism surrounding the transformative potential of Palantir's AIP strategy..