Palantir Stock Surges as Artificial Intelligence Platform Drives US Commercial Growth
Palantir Technologies, the data analytics company known for its Artificial Intelligence Platform (AIP), has seen a surge in its stock as its US commercial business continues to accelerate. The company reported a 70% year-on-year increase in US commercial revenue to $131 million in the fourth quarter, marking a significant acceleration from the previous quarter.
For the full year, US commercial revenue rose by more than double Palantir’s growth rate, reaching $457 million, reflecting the strong momentum in the commercial segment. The company’s customer count in the US commercial sector also experienced robust growth, with a 55% year-on-year increase and a 22% quarter-on-quarter increase, bringing the total to 221 customers in the fourth quarter.
Palantir’s success in the US commercial market has been a major driver of its overall growth. Over the past two quarters, the company added 60 net new US commercial customers, 40 of which were added in the fourth quarter alone, surpassing the previous period’s customer additions by more than three times.
The impressive performance in the commercial segment has translated into Palantir’s stock price, which has soared more than 47% year-to-date and nearly 280% since the start of 2023. Investors are optimistic about the company’s revenue acceleration and bottom line expansion.
Looking ahead, Palantir’s revenue growth is expected to continue its upward trajectory. The company is poised to achieve a revenue growth rate of 20% this year, compared to 17% in the previous year, and nearly 21% in 2025.
Palantir’s AIP is a comprehensive AI solution that allows customers to leverage the company’s AI and machine learning tools. Customers can deploy large language models (LLMs) within Palantir’s Foundry and Gotham platforms on their own private networks, ensuring data security and improving efficiency.
The strong revenue acceleration in the US commercial sector is also driving growth globally. Palantir’s global commercial revenue increased by 22 percentage points in the fourth quarter, reaching a $1.1 billion annual run rate. The company added 45 net new customers in the quarter, with the US commercial segment accounting for more than 90% of these additions.
Despite its strong performance, valuation remains a risk for Palantir. While the company has experienced major improvements in its fundamentals, including gross margin expansion and positive operating margin, the current AI hype may be overvaluing its near-term potential for returns.
Enterprises are increasingly interested in Palantir’s AI platform, leading to a surge in customer additions. The success of the AIP in the US commercial segment has been a key factor in Palantir’s growth. With accelerating revenue and strong fundamentals, the company is well-positioned for continued success in the AI market.
Source: Bloomberg
Analyst comment
Positive news. As an analyst, I predict that Palantir’s stock will continue to rise due to the strong performance of its US commercial business. The company’s revenue growth is expected to continue, fueled by the success of its AI platform and increasing customer additions. However, the risk of overvaluation remains a concern.
