Palantir Raises Its 2024 Revenue Guidance Again Due to Strong AI Adoption; Stocks rise

(Reuters) – Palantir Technologies raised its annual revenue forecast for a third time on Monday, betting on high government spending and rising demand for its software services from companies looking to adopt generative AI technology.

The company's shares rose about 8% in extended trading.

The data analytics company has benefited from the boom in GenAI technology as more companies turn to its AI platform, used for testing, debugging code and evaluating AI-related scenarios.

The company now expects 2024 revenue in the range of $2.805 billion to $2.809 billion, up from the previous expectation of $2.742 billion to $2.750 billion.

The company has been among the biggest beneficiaries of a rally in AI-related stocks, with its shares up more than 140% so far this year. It was added to the S&P 500 in September and has surpassed the index's 20% year-to-date gain.

Additionally, the annual guidance range for adjusted operating income was increased to approximately $1.05 billion to $1.06 billion. It previously forecast $966 million to $974 million.

“Revenue growth driven by demand for AI impacts the bottom line,” CFO David Glazer told Reuters.

While companies are increasingly using Palantir's services, a large portion of its revenue comes from government spending.

Palantir, whose services include providing software to governments to visualize army positions, reported a 40% increase in U.S. government revenue in the third quarter, accounting for more than 44% of its total revenue of $725.5 million.

Analysts on average had expected revenue of $701.1 million, according to data compiled by LSEG.

Palantir also posted its largest profit ever with net income of $144 million in the third quarter, CEO Alex Karp said in a letter to shareholders.

One of the Nordic region's largest investors, Storebrand Asset Management, announced last month that it had sold its Palantir holdings over concerns that the company's work for Israel could risk violating international humanitarian and human rights law .

The company also forecast fourth-quarter revenue above estimates.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel)