Palantir Technologies has changed its forecast of adjusted earnings in 2023 to improve.
The company expects to see a $1 billion share buyback this year. The firm explains the positive changes in the forecast through the transformative potential of its artificial intelligence technology.
Alex Karp, the company’s chief executive officer, made a very bold and very ambitious statement during a conversation with media representatives that the brand he heads has a good chance of becoming the most important software developer in the world. He also noted that the demand for a firm’s AI is unprecedented.
The share price of this company fell by 12% during extended trading. After the publication of the forecast report, this indicator recovered, increasing by about 3%. During the second quarter of this year, the hype around artificial intelligence provoked a 132% increase in the value of the company’s shares.
The Denver-based firm said it expects to make a profit of $2.21 billion during 2023. Analysts predicted that this indicator would be in the range of $2.19 billion to $2.24 billion.
The company forecasts adjusted operating income at $576 million. These expectations exceed the prognostic position of Wall Street, which provides for the mentioned indicator at around $530.3 million.
Palantir has been selling data analysis software to U.S. government agencies and large companies for almost twenty years. The company has been engaged in developments related to artificial intelligence for a long time. At the beginning of 2023, Palantir began to actively advertise the possibilities of advanced technology, as mass interest in it has grown dramatically.
This year, the firm launched its artificial intelligence platform or AIP. This platform is designed to help governments and companies use AI to analyze data and make decisions, including in extreme and extraordinary conditions. The launch of a product based on artificial intelligence occurred without any pricing strategy and had a more than ambitious goal to capture the entire market, which was formulated by Alex Karp.
The CEO of the company on Monday, August 7, during a conversation with investors, said that the AI platform launched about 10 weeks ago, enjoys a high level of demand. More than 100 organizations are users of this product. Alex Karp said this in a letter to shareholders. The company is also currently negotiating sales with more than 300 enterprises.
According to the results of the second quarter of 2023, Palantir demonstrated profit and revenue indicators that exceed analysts’ estimates. In the period from April to June, the company’s adjusted profit increased by 25% year-on-year, reaching $135 million. Revenue for the second quarter was $533 million. Over the same period last year, this figure amounted to $437 million. Analysts had forecast an adjusted operating income of $121.5 million on revenue of $532.4 million.
The company’s commercial revenue in the United States showed growth that was below experts’ expectations. This figure increased by 10% year-on-year during the second quarter, amounting to $ 232 million. Analysts had forecast commercial revenue at $234.2 million.
Palantir’s revenue for government clients increased by 15% to $302 million. Analysts predicted an increase to $301.8 million.
Alex Karp said that Palantir is aiming to get into the S&P 500. To achieve this goal, the company must be profitable within a year. Palantir has been making a profit for three consecutive quarters.
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