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Palantir raises revenue target on AI boost, announces share buyback

Palantir raises revenue target on AI boost, announces share buyback

On August 7th, Palantir Technologies (PLTR.N) announced a modest increase in its annual revenue forecast and unveiled plans for a significant share buyback program amounting to $1 billion. The company is leveraging the growing demand for its artificial intelligence (AI) platform, reflecting its confidence in the technology’s potential.

CEO Alexander Karp highlighted the success of the company’s AI platform, which was launched in April and has already garnered users from more than 100 organizations spanning various industries, including healthcare and automotive. Moreover, Palantir is actively engaged in discussions with over 300 additional companies that are considering adopting its AI solutions. Notably, the platform features an AI assistant capable of aiding enterprises in making informed decisions regarding their operational strategies.

Palantir’s stock performance has been remarkable, with shares surging nearly threefold since the beginning of the year, a trend mirrored by other companies benefiting from AI advancements like C3.ai (AI.N).

Following the post-announcement dip of around 10% due to the company’s disclosure of full-year revenue projections above $2.21 billion—largely aligning with Refinitiv’s estimates—Palantir’s shares rebounded by 3.5% during after-hours trading on Monday. The initial dip was seen as a potential response to these figures falling slightly short of the elevated expectations of retail investors, especially considering Palantir’s positioning as an AI beneficiary, as noted by RBC Capital Markets analyst Rishi Jaluria.

However, the stock’s recovery was bolstered by the substantial share buyback program, a significant move for a company of Palantir’s size, according to D.A. Davidson & Co analyst Gil Luria.

Palantir’s second-quarter financial results showcased a 13% increase in revenue, reaching $533.3 million, which slightly exceeded expectations set at $532.7 million according to Refinitiv data. The company’s adjusted earnings per share were in line with forecasts.

Notably, revenue growth rates for both government and commercial sectors experienced moderation, standing at 15% and 10%, respectively. Chief Financial Officer David Glazer attributed the subdued demand in Europe to the muted performance of the commercial revenue segment, partly influenced by the strategic investments Palantir had made in special-purpose acquisition companies.

Looking ahead, the company anticipates a rise in third-quarter expenses as it accelerates the development of its AI platform and actively recruits a new wave of technical talent to bolster its capabilities.

Palantir’s recent strategic moves, including the adjusted revenue forecast, significant share buyback program, and the promising trajectory of its AI platform, have stirred a mix of responses from investors and analysts. While initial concerns were tempered by the buyback announcement, the company remains dedicated to expanding its AI offerings and enhancing its technical workforce.


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