What to Expect From Palantir's Upcoming Earnings Report

Palantir Technologies is set to release its first-quarter earnings report on May 6. Artificial intelligence and collaboration with the government on defense are the key points for the stock to watch.

• The company's earnings per share (EPS) are projected to be $0.03, reflecting a 227% increase from the same quarter last year.

• The Consensus Estimate for revenue is projecting net sales of $617.69 million, up 17.61% from the year-ago period.

Palantir is benefiting from three main themes. First, countries from around the world are now boosting their defense spending as geopolitical risks rise. In the US, defense spending is expected to get to over $1 trillion in the next few years.

These developments are important because Palantir generates substantial sums of money in the defense industry. Also, global risks are expected to continue rising in the coming years, boosting its revenues.

Palantir gets nearly 60% of its revenue from government agencies. In addition, Palantir has won a new, $178 million U.S. Army contract for project TITAN, a battlefield system using artificial intelligence.

Second, the company is benefiting from the rising demand of its artificial intelligence tools among companies and governments.

Palantir stock bulls point to artificial intelligence software as a growth driver. Palantir has already mined the AI opportunity with government customers for intelligence gathering, counterterrorism and military purposes.

Now Palantir aims to use generative AI to spur growth in the commercial market. The software maker has expanded into health care, energy and manufacturing.

Palantir has not disclosed pricing for AI products. Some analysts say Palantir needs to show progress developing new revenue streams from generative AI.

Finally, Palantir expands its collaboration with partners in cloud computing. Oracle and Palantir announced a cloud computing alliance.

Further, Palantir recently expanded its cloud computing partnership with Microsoft that targets government agencies.

To speed up corporate adoption of artificial intelligence software, Palantir and IBM formed a global partnership. Under the deal, Palantir also made its Foundry software available to IBM's cloud computing customers. The Foundry platform is a centralized data operating system that lets users manage, filter and visualize large data sets.

The most recent results showed that the company’s commercial revenue rose by 32% YoY in Q4 to $284 million. Government revenue rose by 11% to $324 million. In future, analysts expect that the commercial business will be bigger than the defense sector.

Source: Yahoo Finance, Investor’s Business Daily