Palantir earnings top Wall Street estimates

Core Insights - Palantir's third quarter earnings and revenue exceeded expectations, leading to an increase in fourth quarter and full-year sales outlook [1] - The company's shares rose approximately 4% in after-hours trading following the earnings report [2] Financial Performance - Revenue for the third quarter reached $1.18 billion, a 63% increase year-over-year, surpassing Wall Street's expectation of $1.09 billion [2] - Revenue from US government contracts increased by 52% to $486 million, exceeding the expected $470 million [2] - The US commercial segment saw a remarkable revenue increase of 121%, reaching $397 million [6][2] - Adjusted earnings per share were reported at 21 cents, above the expected 17 cents and more than double the EPS of 10 cents from the same quarter in 2024 [3] Business Segments - Palantir's artificial intelligence software is utilized by both businesses and governments, focusing on applications such as supply chain analysis and military target identification [4] - The US government business is crucial for Palantir, especially as defense spending continues [4] Market Reaction and Valuation - Despite strong results, the stock's movement was limited due to its already high valuation, which has increased by 388% over the past year [11] - Analysts noted that the stock is priced for perfection, reflecting high expectations for future growth [13] International Business - The international segment has struggled, with commercial business abroad falling below expectations in recent quarters [17] - Palantir has indicated a focus on selling to the US and its allies, limiting its market reach [18] Ethical Considerations - Ethical concerns regarding Palantir's contracts with entities like ICE and the Israeli military have been raised, but analysts suggest that current market dynamics favor capitalism over these concerns [21]