Palantir Technologies PLTR-Q forecast fourth-quarter revenue above analysts’ estimates on Monday, as the rapid adoption of artificial intelligence boosts demand for its data analytics services from businesses and governments.
Shares of the company gained about 2 per cent in extended trading.
The defence contractor raised its annual sales target for the third time this year, amid strong sales for its services that ease the transition to the complex, data-intensive technology.
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Palantir, co-founded by tech billionaire Peter Thiel, expects fourth-quarter sales of between US$1.327-billion and US$1.331-billion, compared with analysts’ average estimate of US$1.19-billion, according to data compiled by LSEG.
The company also raised its annual sales forecast to a range of US$4.396-billion to US$4.40-billion, from its earlier expectations of between US$4.142-billion and US$4.15-billion.
Palantir last month announced a deal with Nvidia NVDA-Q to use the AI chip leader’s processors and software to help its customers speed up decision-making in complex fields.
It now expects sales to U.S. businesses to exceed US$1.43-billion this year, up from the US$1.30-billion it forecast earlier.
The results come at a crucial moment as big-ticket spending on AI expansion and skyrocketing market valuations have sparked concerns of an “AI bubble.”
Palantir’s shares have more than doubled in value this year, outpacing the gains in the world’s most valuable firm – Nvidia – and the benchmark S&P 500 Index.
The stock trades at a whopping 12-month-forward price-to-earnings ratio of 246.2, compared with Wall Street darling Nvidia’s 33.3, according to LSEG data.
Palantir’s results have also been buoyed by expectations of increased defence spending on its military-grade AI tools.
The company, initially backed by the CIA, is benefiting from a shift in the Pentagon’s software-buying process towards commercial providers under President Donald Trump.
Palantir reported revenue of US$1.18-billion for the quarter ended Sept. 30, beating estimates of US$1.09-billion. Adjusted per share earnings of 21 US cents also beat estimates of 17 US cents.