Palantir reports better-than-expected earnings, but the stock loses momentum following a significant surge.

Shares of Palantir Technologies Inc. experienced a surge on Monday in anticipation of the software company’s earnings report. However, following the release of the results, the gains were reversed during the extended session.

Palantir’s shares experienced a decline of approximately 8% during after-hours trading on Monday. This drop can be attributed, in part, to the high expectations set by investors. It is worth noting that Palantir’s stock has already surged by 47% this year, with an additional 8% gain recorded during Monday’s regular session.

Palantir, however, highlighted the ongoing success of its artificial-intelligence platform, AIP, as it raised its outlook on Monday.

The software company has revised its full-year revenue forecast, now expecting to generate $2.677 billion to $2.689 billion. This is an increase from its previous forecast of $2.652 billion to $2.668 billion. The second-quarter revenue forecast of $649 million to $653 million surpassed the consensus view, which was expecting $643 million.

Palantir has revised its projected adjusted income from operations for the full year to be between $868 million and $880 million. This is an increase from the previous estimate of $834 million to $850 million.

According to Chief Executive Alex Karp, an increasing number of American corporations are recognizing the profound impact that artificial intelligence and large-language models will have on their industries. In a letter to shareholders, Karp expressed how these technologies will reshape the way businesses operate.
Palantir’s outlook has been raised following a strong first quarter performance. The company’s revenue for the year increased to $634 million, surpassing the expectations of analysts who were projecting $615 million. This marks a significant growth from the previous year’s revenue of $525 million.

The net income for the current period was $106 million, or 4 cents a share, which is an increase from $17 million, or 1 cent a share, in the same period last year. Palantir has achieved GAAP profitability for the sixth consecutive quarter. Analysts had anticipated a GAAP earnings of 3 cents per share.

The company’s earnings, on an adjusted basis, were 8 cents per share, which aligns with the FactSet consensus.

According to Chief Revenue Officer Ryan Taylor, Palantir’s software is highly distinguished in the realm of generative AI. While other AI software offerings may prioritize chat applications, Palantir’s product stands out by leveraging large-language models to generate operational outcomes using customer data.

The company’s U.S. commercial business experienced significant growth, excluding the impact of strategic investments. “It’s interesting to observe that customers are seeking ways to increase efficiency and speed,” Taylor remarked.

Meanwhile, Palantir’s U.S. government business experienced a 12% growth compared to the previous year and an 8% growth compared to the previous quarter, indicating a reacceleration. Taylor highlighted the company’s significant Titan deal with the U.S. Army, emphasizing the potential it brings for new opportunities in the U.S. government.

Palantir’s recent achievement of winning the Army award is a significant milestone for the company. This accomplishment marks a groundbreaking moment as Palantir becomes the first software company to secure a prime contract for a hardware system. Taylor, a representative of Palantir, expressed their pride and excitement over this remarkable feat.