Palantir Earnings Preview: PLTR advances 6% ahead of quarterly results
- Palantir will deliver Q1 results after Monday's close.
- Wall Street expects earnings of $0.08 per share.
- Revenue is targeted to arrive at $617.6 million.
- US corporate customer growth and revenue will receive most focus.
Palantir (PLTR) stock is widely expected to best Wall Street expectations when it posts first-quarter results after the close on Monday, May 6. That is why the stock has garnered a 6% increase in value at this week’s session open.
PLTR stock has risen more than 6% at the time of writing to $24.80 as the NASDAQ and S&P 500 both gain 0.6%. It’s a big week for earnings, and much of Wall Street is poised for a flurry of quarterly reports from the likes of smaller growth stocks like Rivian (RIVN), Coupang (CPNG), Uber Technologies (UBER), AirBNB (ABNB), Affirm (AFRM), Roblox (RBLX) and DataDog (DDOG).
Palantir stock news
Wall Street consensus has Palantir earning $0.08 per adjusted share for Q1 on revenue of $617.6 million. The earnings forecast speaks to management’s continued marginal gains in profitability as it continues to focus its resources on revenue growth.
The revenue forecast would signify a healthy 17.6% gain in YoY sales for the quarter ending in March
Recent quarters have shown management endeavoring to spread its successful suite of data analysis products from the government to the private sector. The market may turn on how growth among US corporations turns out in the most recent quarter.
Color on the earnings call surrounding Palantir’s Artificial Intelligence Platform, which is geared toward corporate clients, will also be key.
"The company's commercial business is witnessing a strong acceleration, especially in the US, as demand for the company's AI Platform remains strong," wrote HSBC analysts in a client note last week.
“The big focus tonight will be hearing about AIP customer conversion, US commercial strength momentum, and the trajectory of larger deals in the pipeline,” wrote star analyst Dan Ives from Wedbush Securities. Ives has $35 price target on PLTR.
Some analysts have also complained about “lumpy” revenue from Palantir’s often long-term contracts with government clients. In March, Palantir signed a $178 million deal with the US Army as part of the creation of a new targeting system.
AI stocks FAQs
First and foremost, artificial intelligence is an academic discipline that seeks to recreate the cognitive functions, logical understanding, perceptions and pattern recognition of humans in machines. Often abbreviated as AI, artificial intelligence has a number of sub-fields including artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The end goal of the entire field is the creation of artificial general intelligence or AGI. This means producing a machine that can solve arbitrary problems that it has not been trained to solve.
There are a number of different use cases for artificial intelligence. The most well-known of them are generative AI platforms that use training on large language models (LLMs) to answer text-based queries. These include ChatGPT and Google’s Bard platform. Midjourney is a program that generates original images based on user-created text. Other forms of AI utilize probabilistic techniques to determine a quality or perception of an entity, like Upstart’s lending platform, which uses an AI-enhanced credit rating system to determine credit worthiness of applicants by scouring the internet for data related to their career, wealth profile and relationships. Other types of AI use large databases from scientific studies to generate new ideas for possible pharmaceuticals to be tested in laboratories. YouTube, Spotify, Facebook and other content aggregators use AI applications to suggest personalized content to users by collecting and organizing data on their viewing habits.
Nvidia (NVDA) is a semiconductor company that builds both the AI-focused computer chips and some of the platforms that AI engineers use to build their applications. Many proponents view Nvidia as the pick-and-shovel play for the AI revolution since it builds the tools needed to carry out further applications of artificial intelligence. Palantir Technologies (PLTR) is a “big data” analytics company. It has large contracts with the US intelligence community, which uses its Gotham platform to sift through data and determine intelligence leads and inform on pattern recognition. Its Foundry product is used by major corporations to track employee and customer data for use in predictive analytics and discovering anomalies. Microsoft (MSFT) has a large stake in ChatGPT creator OpenAI, the latter of which has not gone public. Microsoft has integrated OpenAI’s technology with its Bing search engine.
Following the introduction of ChatGPT to the general public in late 2022, many stocks associated with AI began to rally. Nvidia for instance advanced well over 200% in the six months following the release. Immediately, pundits on Wall Street began to wonder whether the market was being consumed by another tech bubble. Famous investor Stanley Druckenmiller, who has held major investments in both Palantir and Nvidia, said that bubbles never last just six months. He said that if the excitement over AI did become a bubble, then the extreme valuations would last at least two and a half years or long like the DotCom bubble in the late 1990s. At the midpoint of 2023, the best guess is that the market is not in a bubble, at least for now. Yes, Nvidia traded at 27 times forward sales at that time, but analysts were predicting extremely high revenue growth for years to come. At the height of the DotCom bubble, the NASDAQ 100 traded for 60 times earnings, but in mid-2023 the index traded at 25 times earnings.
Palantir stock forecast
The Moving Average Convergence Divergence (MACD) indicator has recently crossed over bullishly, and it appears there are two prime targets for bulls on the chart.
First is the $25.50 resistance from February. Next comes the $27.25 resistance from the early March range high.
Below here are supportive structures at $21.85 and $20.84. Without a break of at least the $25.50 level afterhours, expect PLTR to pullback since the Relative Strength Index (RSI) is nearing overbought levels.
But since PLTR stock is trading above its 20, 50 and 100-day Exponential Moving Averages, shares are positioned for an upside bounce.
PLTR daily chart
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
