Financial Report Preview | Is Palantir Riding the "AI Wave" and Continuing to Soar in Stock Price?

According to Zhitong Finance, Palantir Technologies (PLTR.US) is set to announce its first-quarter financial results on Tuesday morning Beijing time. Investors may focus on the company's business revenue growth and whether the big data analytics software manufacturer can prove the sustainability of its artificial intelligence (AI) business growth. Analysts estimate that Palantir's revenue in the first quarter of 2024 is expected to reach $615.32 million, higher than the same period last year; the estimated net profit is $83.94 million, or $0.03 per share, higher than the $19.15 million and $0.01 per share in the same period last year.

Key Metric: Business Revenue Growth

Investors will be watching the continuous growth of Palantir's commercial sector. Due to the surge in demand for its AI platform, the company reported better-than-expected earnings in the last quarter of 2023. In 2023, commercial revenue accounted for about 45% of Palantir's total revenue, with the rest contributed by government business revenue. In March of this year, Palantir announced a $178.4 million contract with the U.S. Army.

Palantir CEO Alex Karp wrote in a letter to shareholders in February, "Our U.S. commercial business remains a significant driver of our growth, and we expect this trend to continue."

In the last quarter of 2023, Palantir's commercial revenue in the U.S. soared to $131 million, a 70% year-on-year increase. According to estimates compiled by Visible Alpha, analysts expect Palantir's total revenue from the commercial sector in the first quarter to reach $290.4 million, higher than the $284 million in the fourth quarter of 2023 and $236.1 million in the same period last year.

The strong growth of Palantir's commercial business may enhance investors' confidence in the company's ability to expand beyond government clients. Goldman Sachs analysts believe that as Palantir's advantage in data integration intersects with clients' AI projects, the key debate surrounding the stock will be the sustainability of its business growth.

Business Focus: Sustaining AI Development Momentum

Investors will focus on executive comments during the earnings call to assess whether the momentum of artificial intelligence can sustain Palantir's growth. With the surge in demand for AI, there is enthusiasm about Palantir's potential, leading to an increase in its stock price Some analysts believe it is a key favorable factor, while others think it is overvalued in terms of artificial intelligence speculation.

Wedbush analysts referred to Palantir as the "Messi of artificial intelligence" - likening it to soccer star Lionel Messi. They said, "Every decade, there are a few times when a technology company is so far ahead of its competitors, in the best position for future growth."

In contrast, Jefferies analysts stated that the stock's potential in artificial intelligence is "exaggerated," writing that the company had "underestimated the severity of the slowdown in Palantir's commercial and government business, leading to a longer-than-expected recovery time that may continue to limit growth until 2024."

Palantir's stock price rose 3.46% last Friday to $23.33; it has risen over 31% since the beginning of 2024