Palantir Technologies (NYSE:PLTR) initially focused on serving the defense and intelligence sectors but has since expanded its customer base to include various industries such as healthcare, energy, and finance.
Recent achievements in profitability and AI analytical tools are just a few of the reasons investors should be bullish on Palantir stock.
Palantir Expands
Palantir’s revenue has grown in the double digits over the past few years, reaching $1.9 billion in 2022, a 23.6% increase from 2021. Palantir has definitely grown from primarily building software for the United States Intelligence Community to creating powerful data analytics tools for both enterprises and government agencies.
Specializing in AI and ML, Palantir helps these businesses and agencies unlock insights from their data. Palantir’s platforms, Foundry and Gotham, leverage AI and ML to enable data integration, analysis, and visualization.
Gotham delivers integration and analytics of data from multiple sources for intelligence purposes. Foundry enables businesses to transform their data into actionable insights.
A breadth of data analytics services should allow Palantir to successfully sell into new markets in the long run.
Profitability Margins Keep Improving
While this year has been a mixed bag for the data analytics firm. The company has been profitable since Q4 2022. Palantir surpassed earnings estimates in Q1 2023, with 18% YoY revenue growth and positive GAAP net income for a second consecutive quarter, driven by strong growth in commercial and government segments.
However, in the second quarter, Palantir slightly missed EPS estimates but still remained profitable.
CEO Alex Karp reported the company was struggling to see new opportunities in continental Europe, a significant growth market for the firm. Shares plummeted 11% after that earnings release, but Palantir’s continued profitability despite difficulties on revenue growth exemplifies its resilience.
Strong Q3 Results
Demand for Palantir’s artificial intelligence solutions is starting to pick up, according to the company’s recent earnings report.
While overall revenue for the third quarter increased 17% to $558 million, from $478 million a year earlier, the company’s “U.S. Commercial business segment”, increased revenue figures by 37% on a year-over-basis driven by demand for Palantir’s Artificial Intelligence Platform.
The data analytics firm’s AIP can deploy commercial and open-source large language models (LLMs) onto internally held data sets and, from there, recommend business processes and actions.
Powerful AI products in the beginning of the year, including ChatGPT, has spurred demand for an array of similar products in the novel space, and Palantir can continue to benefit from this new trend in the coming years.
On the date of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
