Palantir Gains 15% After Reporting Its First GAAP Profit

Key Insights

• Palantir reported the first GAAP profit in the company’s public history. 
• The company’s customer base is growing fast despite macroeconomic headwinds.
• The general optimism in the tech segment after the recent success of ChatGPT provided additional support to the stock. 

Palantir Exceeded Analyst Estimates

Palantir, which builds digital infrastructure for decision making, rallied 15% after beating analyst estimates on both earnings and revenue.

The company reported revenue of $509 million and adjusted earnings of $0.04 per share. On a GAAP basis, the company earned $0.01 per share. This is Palantir’s first quarter of positive GAAP net income, so it’s not surprising to see that traders rushed to buy the stock.

Palantir reported that its customer count grew 55% year-over-year and 9% quarter-over-quarter, so the company continued to grow at a robust pace.

For the full year 2023, Palantir expects revenue of $2.18 million – $2.23 million and adjusted income from operations of $481 million – $531 million. The company also expects to report GAAP net income for the full year, which will be a major milestone for Palantir.

The Stock Is Trading Well Below 2021 Highs

Palantir touched highs at the $45 level back in January 2021. Later, unprofitable companies fell out of fashion, and Palantir moved towards the recent lows near the $6 level.

Analyst estimates for Palantir earnings have been stable in recent weeks, although they may start to move higher after today’s earnings report.

The general optimism around artificial intelligence provides additional support to Palantir stock as traders are searching for companies that are close to this exciting segment.

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