By Arsheeya Bajwa (Reuters) -Palantir Technologies on Monday raised its annual revenue forecast for the second time this year, expecting sustained demand for its AI-linked services from businesses and governments. The data analytics and defense software firm is getting a boost from U.S. President Donald Trump’s focus on national security and a shift in the […]
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Palantir lifts annual revenue forecast again as AI demand accelerates
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By Arsheeya Bajwa
(Reuters) -Palantir Technologies on Monday raised its annual revenue forecast for the second time this year, expecting sustained demand for its AI-linked services from businesses and governments.
The data analytics and defense software firm is getting a boost from U.S. President Donald Trump’s focus on national security and a shift in the Pentagon’s software-buying process towards commercial and “non-traditional” providers.
Last week, the U.S. Army said it might purchase services of up to $10 billion from the company over a decade.
Palantir’s shares were up 4% in extended trading. They have more than doubled in value this year, as investors bet on the company’s ability to benefit from the proliferation of AI technology and government spending on defense tech.
The company projected revenue in the range of $4.14 billion to $4.15 billion this year, up from its earlier forecast of between $3.89 billion and $3.90 billion.
The raised forecast is also above analysts’ average estimate of $3.90 billion, according to data compiled by LSEG.
Sales to the U.S. government jumped 53% to $426 million, representing more than 42% of total second-quarter revenue of about $1 billion, which beat estimates.
“They have accelerants on both sides (commercial and government)” said Gil Luria, an analyst at D.A. Davidson who has a “neutral” rating on the stock.
“On the government side, their capabilities have gotten to a point where they can be the lead contractor on increasingly large projects.”
Palantir, co-founded by tech billionaire Peter Thiel, said it expects revenue derived from U.S. businesses to come in above $1.30 billion this year, up from its earlier guidance of more than $1.18 billion.
The company beat second-quarter adjusted earnings expectations and forecast current-quarter sales above estimates.
HIRING FRENZY
Palantir expects expenses to significantly ramp up in the third quarter due to the seasonality of the hiring process, CFO David Glazer said during a post-earnings call.
Tech firms have been competing to attract and retain top talent, as they race to champion rapidly evolving AI technology.
“We are doing very well on the talent acquisition and retention side,” CEO Alex Karp said on the call.
As the hiring frenzy for AI roles escalates to professional athlete levels, Karp said that recruiting did not focus on educational background.
“Once you come to Palantir, you’re a ‘Palantirian’. No one cares about the other stuff.”
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sriraj Kalluvila)