Palantir has reported strong forecasts for its first-quarter and annual revenue, exceeding Wall Street expectations, with over 40% of its fourth-quarter sales stemming from U.S. government contracts.
Following these positive projections, shares of Palantir surged by 22% in after-hours trading, with the company predicting fiscal 2025 revenue between $3.74 billion and $3.76 billion, surpassing analyst estimates of $3.52 billion.
In the fourth quarter, Palantir's adjusted earnings per share were reported at 14 cents, outperforming the expected 11 cents per share.
For the upcoming March quarter, Palantir forecasts revenue between $858 million and $862 million, exceeding the consensus estimate of $799.4 million.
In a recent statement, Chief Revenue Officer Ryan Taylor advised clients to avoid using AI models from the Chinese startup DeepSeek, highlighting concerns over national security.
This warning aligns with investigations by U.S. officials, including a ban on DeepSeek's technology for federal agencies like NASA due to potential national security risks.
Despite its strong ties to government contracts, Palantir aims to reduce its reliance on this revenue stream, anticipating a 54% growth from U.S. businesses in 2025, which would amount to over $1.80 billion.
Taylor noted that the expanded tariffs imposed by former President Trump could further boost demand for Palantir's analytics services, particularly in supply chain and logistics management.
The rising demand for generative AI technologies has also contributed to increased sales of Palantir's AI platform, which assists businesses in testing and debugging code.
Analyst Gil Luria remarked that Palantir's objectives align closely with the current U.S. administration's goals, emphasizing the company's strong government partnerships.
Co-founded by Peter Thiel, Palantir specializes in providing data analytics solutions to government entities, including software for military applications.
While discouraging the use of DeepSeek's AI models, Taylor mentioned that Palantir would continue to support clients who choose to utilize them.
