Palantir raises revenue target on AI boost, announces share buyback

By Chavi Mehta

(Reuters) -Palantir Technologies slightly raised its annual revenue forecast on Monday and said it would buy back shares worth up to $1 billion, banking on growing demand for its artificial intelligence platform.

CEO Alexander Karp said the AI platform, launched in April, has users across over 100 organizations, including in the healthcare and automotive industry, and that Palantir was in talks with more than 300 additional companies.

The platform includes an AI assistant that can help enterprises make decisions about their operations.

Shares of the company have nearly trebled so far this year, rallying along with other AI beneficiary stocks like C3.ai.

Palantir’s share rose 3.5% in trading after the bell on Monday, following a 10% dip after the company said it expects full-year revenue above $2.21 billion, largely in-line with Refinitiv estimates.

It had previously expected revenue in the range of $2.19 billion to $2.24 billion.

“Given the heightened expectations of the stock from the retail investor base around Palantir being an AI beneficiary, these are kind of disappointing numbers,” said RBC Capital Markets analyst Rishi Jaluria.

The shares recovered because of the buyback, which is significant for a company the size of Palantir, D.A. Davidson & Co analyst Gil Luria said.

Palantir second-quarter revenue rose 13% to $533.3 million, which was only slightly above estimates of $532.7 million, according to Refinitiv data. Its adjusted profit per share was in-line with expectations.

Revenue growth at both government and commercial revenue slowed to 15% and 10%, respectively.

Chief Financial Officer David Glazer said demand in Europe was muted and the company’s commercial revenue was impacted by its strategic investments in special purpose acquisition companies.

Palantir third-quarter expenses would rise as it was ramping up its AI platform and hiring “a new class of technical talent”, he said.