Palantir Technologies, Inc. (NYSE:PLTR) reported Monday after market close second-quarter results that came in line and issued upbeat guidance.
The Palantir Analyst: Wedbush’s Daniel Ives, who recently initiated the stock, maintained an Outperform rating and $25 price target.
The Palantir Thesis: Palantir bulls will likely focus on the positive commentary around AIP, the company’s artificial intelligence platform, launched 10 weeks ago, said Ives in a note. The AIP was front and center of the quarterly results and overall customer count rose about 38% year-over-year, the analyst said.
Ives sees the 35% growth in U.S. commercial customer count to 161 as a large step forward to the company’s expansion in the space.
The revenue beat was made possible due to strength in its government business, the analyst said, adding that the commercial segment was also gaining traction. The company recorded its third consecutive year of GAAP profitability and adjusted free cash flow came in at $96 million, well above the Street estimate of $68.6 million, he added.
The analyst also noted that the company raised the mid-point of full-year revenue guidance, calling for top-line excess of $2.212 billion, compared to the previous outlook of $2.185 billion to $2.235 billion. It also raised the operating income guidance from $506 million-$556 million to $576 million.
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With AIP “a star is born,” Ives said. CEO Alex Karp’s letter to sharehZenger News suggests the platform is seeing the strongest demand in the past 20 years, the analyst said.
He also noted that the company is engaging with 300+ enterprises to deploy AIP, all “searching for an efficient and secure solution to adapt the latest LLMs for use on internal systems and proprietary data.”
“With a raise in FY23 guidance, a significant increase in customer count, strong performance, and the AI arms race well underway, we continue to believe Palantir is the gold standard in AI,” Ives said.
Palantir Price Action: Palantir rose 2.61% in Monday’s after-hours session to $18.46, according to Zenger News Pro data.
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