Palantir Technologies Inc. (PLTR – Free Report) is an eminent player in the artificial intelligence (AI) segment that provides platforms like Gotham and Foundry, which help commercial and government customers optimally use data to solve problems competently.
Palantir’s initiatives to integrate innovative AI and machine learning functionalities in its platform have helped the company expand its business. Its share prices have surged 371.6% over the past year, way more than the Technology Services industry’s gain of 67%. Its shares, in particular, soared 24% on Tuesday after the company posted blowout fourth-quarter earnings results fueled by the boom in AI.
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Palantir’s recent rapid growth has brought it close to the market capitalizations of International Business Machines Corporation (IBM – Free Report) and Cisco Systems, Inc. (CSCO – Free Report) . However, is it now too late to buy the PLTR stock? Let’s evaluate its potential for your portfolio this year –
Palantir Reports Upbeat Q4 Results, Issues Strong Guidance
Palantir’s revenues in the fourth quarter were $828 million, up 36% from a year ago, exceeding the estimated $782 million. Revenues were mostly fueled by the U.S. commercial segment, which saw revenues jump 64% year over year (YoY). Revenues from the U.S. government segment also climbed 45% YoY.
The company’s adjusted earnings per share (EPS) were $0.14 for the fourth quarter, surpassing the estimated $0.11, marking a 75% increase YoY. Customer metrics drove such strong results for the company. In the fourth quarter, an uptick in U.S. commercial clients helped Palantir’s customer count jump 43% YoY, while the company was able to ink 129 deals worth a minimum of $1 million.
Palantir’s 2025 revenue guidance is $3.75 billion, a 31% YoY increase, with U.S. commercial revenues projected to rise by 54%, surpassing management’s forecast of 50% growth in the last quarter. For the first quarter, revenues are estimated to be $862 million, suggesting 36% YoY growth. Palantir’s guidance for the first quarter and the full year crushed Wall Street expectations.
How to Trade PLTR Stock Now
While the Palantir stock got a boost from its stellar fourth-quarter results, the encouraging revenue guidance indicates that management has confidence in its growth strategies and the PLTR stock has more room to run. CEO Alex Karp’s optimistic outlook highlights the shift to a new growth phase, emphasizing sustained acceleration.
Palantir is well-positioned for strong growth driven by high demand for the company’s Artificial Intelligence Platform (AIP), which is capable of automating tasks beyond human capability. Moreover, in the fourth quarter, Palantir’s remaining performance obligation (RPO) exceeded present revenue growth, indicating room for further expansion.
From a technical perspective, Palantir’s shares are currently trading above both the short-term 50-day moving average (DMA) and long-term 200 DMA, signaling a bullish trend.
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Additionally, if Palantir secures a niche in the growing generative AI market, the PLTR stock can grow much higher in the next decade. With an expected earnings growth rate of 17.1% this year, it’s a timely opportunity to consider placing bets on PLTR stock. Palantir, rightfully, has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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