Palantir Revenue Report: Investors on Hold

Palantir Technologies Inc. (PLTR) is preparing to announce its third-quarter revenue report after the market close on Monday. This report will test the recent rise of artificial intelligence stocks.

The company’s shares have increased by more than 28% since the quarterly report from last month. This rise is greater than the 20% increase seen in large technology stocks known as the "Magnificent Seven" during the same period.

According to Bloomberg data, Palantir's revenue for the September quarter is expected to be $1.09 billion. This represents a 50% increase compared to the same period last year.

Of this revenue, analysts expect that revenue from government contracts will be $599 million, which indicates a 47% increase compared to the previous year’s figure. The company’s commercial segment is anticipated to generate $491 million in revenue, representing a 55% increase over the third quarter of last year.

The company’s adjusted earnings per share are expected to be $0.17; this figure was $0.10 last year.

Options traders predict that Palantir's stock could rise or fall by approximately 9% following the results. Historically, Palantir shares have shown movements of up to 14% after quarterly reports.

Palantir sells its artificial intelligence software to businesses and governments domestically and abroad. The company's technology is used in various areas, from supply chain analysis to surveillance and identifying military targets. However, contracts with the Israeli army and the U.S. Department of Homeland Security have faced negative public reactions.

After the latest report, investors are keenly following the potential impact of a U.S. government shutdown on Palantir's fourth-quarter revenues and earnings forecasts. Analysts from Morgan Stanley and RBC Capital Markets pointed out in their notes this month that this could be mitigated.

Palantir shares have recorded an increase of more than 170% since the beginning of the year. The company's shares rose nearly 3% ahead of the third-quarter results.

While the last two quarterly reports surpassed Wall Street expectations on both the top and bottom lines, they resulted in mixed outcomes for the stock. The first quarter results led to a decline in shares as they highlighted the company's high valuation. However, Palantir's second-quarter results in August caused the stock to rise as the company’s U.S. commercial segment exceeded analyst predictions. This segment recorded an increase of over 90% in revenue compared to the same period last year; commercial revenue rose from $306 million to $159 million in the second quarter of 2024.