JJ8
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CORRECTED-UPDATE 3-Palantir raises 2024 forecast on robust AI demand, but falls short of lofty expectations
7:32 PM ET, 05/06/2024 - Reuters
(Corrects the number of analysts polled in paragraph 3 to 17, not four)
By Arsheeya Bajwa
May 6 (Reuters) - Data analytics firm Palantir Technologies raised its annual revenue forecast on Monday, riding on strong demand for its services that help businesses deploy artificial intelligence applications.
However, its shares fell more than 7% in after-hours trading as the raised revenue forecast was below analysts' expectations.
The company, co-founded by billionaire Peter Thiel, raised the mid-point of its expectations for annual revenue to $2.68 billion, which fell short of an average estimate of 17 analysts of $2.71 billion, according to LSEG data.
"(The share reaction was) probably a result of investors expecting a far greater beat and raise versus what Palantir delivered," said Morningstar analyst Malik Ahmed Khan.
Palantir has benefited from the generative AI boom thanks to its artificial intelligence platform (AIP), which, among other uses, tests and debugs code and helps evaluate AI-related scenarios.
"AIP is driving a huge part of both our new customers and growth within existing customers, and it's having a huge impact on our business," chief revenue officer Ryan Taylor told Reuters.
Taylor said businesses were signing "seven-figure deals shortly" after completing its AI boot camps, which give potential clients access to its platform for up to five days and have been credited with driving rapid customer additions.
Palantir reported first-quarter revenue of $634.3 million which beat analyst expectations and its largest quarterly profit, according to a CEO letter.
Much of the focus has been on the company's attempts to diversify its revenue to reduce its reliance on government spending. Palantir works closely with governments, providing software for visualizing army positions, among other things.
Revenue growth in the U.S. commercial business, which accounts for sales to businesses in the country, slowed to 40% year-over-year in the first quarter, compared to 70% in the prior quarter.
This deceleration was never going to be received well, said RBC Capital Markets analyst Rishi Jaluria.
The Denver, Colarado-based company, however, raised its 2024 U.S. commercial revenue forecast to above $661 million from its earlier expectations of about $640 million.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)
DiscoverGold
1 week ago
Palantir Technologies (PLTR) Stock Poised For a Big Move This Week
By: Schaeffer's Investment Research | May 6, 2024
• PLTR received a price-target hike before earnings tonight, and could be in store for more
• Palantir reports earnings tonight and has a history of outsized post-report moves
Palantir Technologies Inc (NYSE:PLTR) stock is up 6.5% to trade at $24.85 at last check, thanks to a price-target hike to $23 from $20 at Citigroup. The bull note comes ahead of the software company's first-quarter earnings report, due out after the market closes today.
PLTR is 43.8% higher in 2024, and is trading at its highest level in over a month today. The shares are not far off their March 4 nearly three-year high of $27.50, and have support in place at their upward-sloping 80-day moving average. Year-over-year, the equity is up 234%.
A big chunk of those gains are attributed to post-earnings bull gaps. Palantir has a volatile history of post-earnings reactions, gapping higher by 30.8% after the February report, but also shedding 10.5% after its August report. Overall, the stock averages a post-earnings move of 17.2%, regardless of direction. This time around, for Tuesday's trading, the options market is pricing in a larger-than-expected post-earnings move of 21.4%.
For a stock with all these healthy gains over various timeframes, the analyst community has been awfully slow to react. Of the 14 brokerages covering PLTR, 11 still maintain "hold" or worse ratings. And considering the consensus 12-month price target of $20.87 is a 15.7% discount from the stock's current perch, another encouraging earnings report could prompt more bull notes this week.
Read Full Story »»»
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Oleblue
1 month ago
Is the Deal Between Palantir Technologies and Oracle a Game Changer?
Danny Vena, The Motley Fool
Mon, Apr 8, 2024, 2:00 PM EDT
One of the most high-profile trends over the past year or so has been the growing adoption of artificial intelligence (AI). The latest advances in this quickly evolving field have created something of an AI gold rush as businesses scramble to determine how best to leverage this nascent technology.
There are a vast and growing number of applications for generative AI, which can create original content, including text, images, and video. It can also summarize data, produce presentations, and streamline time-consuming and mundane tasks, thereby increasing worker productivity. Time is money, so companies are eager to claim their share of the expected windfall.
Now, AI software and data analytics pioneer Palantir Technologies (NYSE: PLTR) and database and cloud computing specialist Oracle (NYSE: ORCL) are joining forces to help bring AI to the masses.
The letters AI emblazoned on a cloud symbol positioned above a circuit board.
Image source: Getty Images.
A pairing of titans
In a press release on Thursday, Palantir and Oracle announced a far-reaching collaboration to combine their AI and cloud expertise to further accelerate the adoption of AI. The duo will "provide secure cloud and AI solutions aiming to power businesses and governments around the world."
The goal of the partnership is to help organizations get the most value out of their data, thanks to the combination of Palantir's "leading AI and decision acceleration platforms," which will leverage Oracle's "distributed cloud and AI infrastructure."
Palantir offers three broad-based data analytics software services. Gotham is the company's original government-centric and defense-oriented data analytics platform. Foundry offers similar services for corporate and enterprise clients, and Metropolis handles banks, hedge funds, and other financial services firms.
As part of the agreement, Palantir will move Foundry workloads to Oracle Cloud. Furthermore, Palantir will make Gotham and Artificial Intelligence Platform (AIP) -- its generative AI offering -- deployable across Oracle's distributed cloud for the first time.
One of the obvious target markets is government customers and enterprise users seeking greater control over their data. The release highlighted Oracle's "air-gapped regions for defense and intelligence customers," and Palantir's work with law enforcement and government intelligence agencies is well documented. Combining Palantir's AI-powered data analytics with Oracle's secure cloud seems like a no-brainer.
A win-win situation.
Both Palantir and Oracle have been attracting attention for their AI efforts in recent months.
Palantir's expansion beyond its original government mandate has served the company well. In the fourth quarter, revenue of $608 million grew 20% year over year, and Palantir generated its fifth consecutive quarterly profit, but that tells just part of the story. While government revenue -- which tends to be lumpy -- grew 11% year over year, commercial revenue increased 32%. This was led by its U.S. commercial segment -- its fastest-growing business -- as revenue soared 70% year over year and is expected to jump at least 40% in 2024.
The catalyst for that growth was AIP. Palantir began offering boot camps to kick-start customer adoption of AI and demand has been off the charts. By working side-by-side with Palantir's engineers, companies can solve real-world and business-specific problems with the help of its generative AI-powered application.
In October, management announced Palantir's intention to complete 500 such boot camps over the coming year. The company has since "blown that goal out of the water," hosting more than 560 boot camps across 465 organizations in just four months.
Oracle has also been attracting attention for its recent successes. In its fiscal 2024 third quarter (ended Feb. 29), revenue of $13.3 billion grew 7% year over year, generating adjusted earnings per share (EPS) of $1.41, up 16%.
It was Oracle's backlog, however, that raised eyebrows. The company's remaining performance obligation (RPO) -- or contractually obligated sales that haven't yet been booked as revenue -- jumped to $80 billion, up 29% year over year to an all-time record.
Furthermore, Oracle's cloud infrastructure revenue increased 52% year over year. This far outpaced the performances of Amazon Web Services, Alphabet's Google Cloud, and Microsoft Azure, which generated growth of 13%, 26%, and 30%, respectively. This suggests Oracle was stealing market share at the expense of the competition. CEO Safra Catz said demand for its AI cloud capabilities "substantially exceeds supply," and expects Oracle's cloud infrastructure operation to remain in a "hypergrowth phase ... for the foreseeable future."
Is the deal a game changer?
One of the biggest benefits of this deal is that Palantir and Oracle will -- jointly and individually -- offer a wide range of complementary cloud and AI services. Oracle Cloud provides "performance, scalability, and flexibility." When combined with Palantir's "leading data and AI platforms," it offers users the best of both worlds and could attract potential customers who might otherwise pass.
Given their growth prospects and the tantalizing AI wild card, both stocks offer compelling opportunities. Oracle is currently selling for 22 times forward earnings, making it a steal. At 70 times forward earnings and 16 times forward sales, Palantir might seem prohibitively expensive, but those metrics fail to factor in its accelerating growth. However, the forward price/earnings-to-growth (PEG) ratio -- which takes that growth into account -- results in a multiple of less than 1, the standard for an undervalued stock.
While the deal might not rise to the level of being a game changer, it does enhance the prospects of two of AI's fastest-rising stars. It will also likely help both companies continue to expand their market share in the fast-growing AI space.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet, Amazon, Microsoft, and Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Oracle, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Is the Deal Between Palantir Technologies and Oracle a Game Changer? was originally published by The Motley Fool
https://finance.yahoo.com/news/deal-between-palantir-technologies-oracle-180000463.html
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