Palantir Technologies (PLTR) experienced a significant rally in its stock price during Tuesday's trading session, following the release of its impressive second-quarter results, which exceeded expectations. The surge in demand for its artificial intelligence solutions was termed 'unprecedented' by analysts at Wedbush Securities, highlighting the company's strong market position. For the three months ending June 30, Palantir's adjusted earnings per share increased to $0.09, a notable rise from $0.05 in the same period last year.
This result surpassed Wall Street's forecast of $0.08. Additionally, the company reported a revenue increase of 27% year-over-year, totaling $678.1 million, which also exceeded the Capital IQ consensus of $652.4 million. Chief Executive Alex Karp emphasized the company's growth in both commercial and government sectors, attributing this success to an 'unrelenting wave of demand' for advanced artificial intelligence systems.
In a shareholder letter available on the company’s website, Karp stated, 'Our growth across the commercial and government markets has been driven by an unrelenting wave of demand from customers for artificial intelligence systems that go beyond the merely performative and academic.' The market responded positively, with Palantir's stock soaring 11% during the trading day.
Following the release of these results, Wedbush analysts raised their price target on Palantir shares from $35 to $38 while reaffirming their outperform rating. They noted that this quarter could be a pivotal moment for Palantir, especially with the monetization of its artificial intelligence platform gaining traction in the US commercial market. According to analysts including Daniel Ives at Wedbush, 'This was a game-changer quarter for the Palantir story as the artificial intelligence platform monetization piece on US commercial was front and center as a major growth driver.' In terms of customer growth, Palantir reported a 41% year-over-year increase in its customer base, driven by an impressive 83% rise in the US commercial sector.
Consolidated commercial revenue saw a growth of 33%, reaching $307 million, supported by a staggering 55% increase in revenue from US operations. Moreover, the company observed a 23% rise in sales from its overall government division. Looking forward, Palantir provided optimistic revenue projections for 2024, estimating a range between $2.74 billion and $2.75 billion, up from the previous guidance of $2.68 billion to $2.69 billion.
Analysts at Wedbush noted that the market had anticipated revenue of around $2.70 billion. The company also raised its outlook for US commercial revenue to surpass $672 million. In terms of operational income, Palantir projected adjusted income from operations to be between $966 million and $974 million, adjusting its earlier projections of $868 million to $880 million.
Notably, this marks the second occasion that Palantir has raised its full-year revenue and operating income guidance for 2024, a clear indication of robust customer conversion and expansions driven by its AI products. As for the current quarter, Palantir anticipates revenues between $697 million to $701 million, reflecting the continuing strong demand for its products and services in the market..