Following an earnings report that completely exceeded expectations, Palantir Technologies’ shares shot up 22% in premarket trading on Thursday, sending Wall Street into a frenzy. Analysts were forced to modify their price expectations after the data analytics giant announced its sixth straight profitable quarter, won a huge $900 million military contract, and provided an optimistic 2025 revenue outlook.
Palantir’s explosive growth demonstrated its growing supremacy in the AI-driven government and commercial analytics industry, even as the Dow Jones fell 1.2% due to economic concerns.
During the Palantir earnings call, CEO Alex Karp said, “We’re not just growing we’re accelerating.” He asserted a 40% increase in U.S. commercial contracts as evidence of the company’s speed.
Palantir’s Earnings Blow Past Expectations
Palantir’s Q4 sales of $1.67 billion above Wall Street’s $1.53 billion forecast, and its earnings per share (EPS) of $0.12 significantly outperformed the $0.08 forecast. The company’s 2025 outlook, which predicted $7.2 billion in revenue much greater than previous projections was the big stunner, though.
Government contracts remained a lucrative industry, with income rising 23% annually to $1.1 billion. The true star of the show, though, was Palantir’s commercial division, which grew by 45% as big sectors like healthcare, energy, and finance embraced AI-driven analytics.
CFO David Glazer declared, “We are no longer only a government contractor.” “The fastest-growing section in our history is currently our commercial business.”
AI and Government Deals Drive Palantir’s Success
Its quick growth was largely attributed to Palantir’s Artificial Intelligence Platform (AIP), which is currently being used by over 300 businesses, including 12 Fortune 500 corporations. Palantir’s image as a vital defense asset has been further cemented in the government sector, where its platforms have become vital tools for the Pentagon and NATO partners.
Karp underlined, “We are the AI operating system in the national security area.”
In Q4 alone, the company’s Foundry Platform which facilitates real-time AI decision-making acquired 78 new business clients.
PLTR Stock Erupts as Short Sellers Get Crushed
Trading activity exploded as soon as Palantir’s earnings report was released. Overnight, the market capitalization of PLTR increased by $12 billion as its shares jumped from $18.50 to $22.70 in premarket trading.
Devastating losses were incurred by short sellers who had wagered against the company’s AI growth. By lunchtime, options trading had skyrocketed, with $25 strike calls dominating retail interest on Reddit and X (previously Twitter), and more than $500 million in short positions had been liquidated.
Jim Cramer of CNBC pointed out that this was more than simply retail FOMO. “The pressure was harsh, and hedge firms were caught off guard.”
Wall Street Scrambles to Upgrade PLTR Price Targets
Major investment companies were obliged to raise their price targets due to Palantir’s strong outlook and the earnings beat.
Citing its leadership in AI-powered government contracts, Morgan Stanley upgraded PLTR to “Overweight.”
Palantir is “the most promising AI-driven business software startup,” according to Goldman Sachs, which increased its target from $15 to $30.
Citron Research, a well-known Palantir critic, acknowledged defeat in a tweet, saying, “We were incorrect.” The demand for AI is real.
There are still valuation worries in spite of the euphoria. Palantir’s current P/E ratio of 120x raises concerns regarding its sustainability. Bulls contend that the rise is only beginning, despite reports that the S&P 500 may be included.
During the results call, Karp made it obvious where he stood by warning doubters, saying, “Bet against us at your own peril.”
What’s Next for Palantir?
There is no denying Palantir’s momentum, but it is still unclear if the stock can sustain its rapid rise.
- Bullish Case: Analysts predict that Palantir will trade at $35+ per share by the end of the year if it keeps growing its commercial AI footprint.
- Bearish Case: A decline might be brought on by high valuations and macroeconomic risks.
- Wildcard: Institutional investor demand may cause shares to surge even higher if Palantir gets listed on the S&P 500.
For now, Wall Street is taking AI more seriously than ever before, and PLTR investors are rejoicing.
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