In J.R.R. Tolkien's fantasy epic "The Lord of the Rings," a palantir was an indestructible crystal ball used for communication and seeing events in other parts of the world and in the past.
In 2003, Peter Thiel, co-founder and chairman of Palantir Technologies (PLTR) , thought that would be the perfect name for the software platform company.
You won't have to look into any crystal ball to find Palantir, as the company has been creating some serious magic of its own.
While Palantir's sales are largely driven by helping the U.S. government with its counterterrorism efforts, it's also pushed more deeply into managing, interpreting and reporting data for large companies.
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The company's revenue has been boosted by surging AI activity after the successful December 2022 launch of OpenAI's ChatGPT, the first large language model AI app to become widely available.
In February, Palantir posted fourth-quarter earnings of 8 cents per share on $608.4 million in sales, beating analysts' call for $602.9 million.
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Palantir CEO: U.S. commercial performance 'bombastic'
"Obviously, our performance in U.S. commercial is extraordinary; some would say bombastic," Chief Executive Alex Karp told analysts during the company's earnings call. "The numbers that just fly off the screen are the 70% year-on-year growth in Q4."
Citing the company's more than 100 contracts, Karp said "it's almost inconceivable to do that many contracts given the way our product used to be."
"And so, what you see is a convergence of our product being easier to use, an augmentation of its charisma, both driven by developments in AI, large language models, which make the product approachable foundry to the broader market," he said.
Karp said that Palantir was proud to support the U.S. and the U.S. military.
"We are proud to have an operational crucial role in Ukraine," he said. "And I am exceedingly proud that after October 7, within weeks, we are on the ground, and we are involved in operationally crucial, operations in Israel." Oct. 7, 2023, was the day that Hamas invaded Israel, killed 1,200 people and kidnaped more than 200.
Earlier this month, Palantir and Oracle (ORCL) announced a partnership where they would jointly sell cloud and AI services.
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As part of the agreement, Palantir said it would move its Foundry workloads to Oracle Cloud Infrastructure and make its Gotham and AI Platforms deployable across Oracle's distributed cloud.
Gotham is an intelligence and defense tool used by militaries and counter-terrorism analysts, while Foundry is used for data integration and analysis by corporate clients.
Oracle is one of the top 10 largest cloud providers, and its position as a multidecade leader in data management has given it global reach.
Analyst is investing in Palantir for the future
On April 17, Palantir said that it had been designated as an Awardable vendor for the Chief Digital and Artificial Intelligence Office’s Tradewinds Solutions Marketplace.
The Tradewinds Solutions Marketplace is a digital repository of awardable capabilities that can address challenges the Department of Defense faces in the arena of artificial intelligence, machine learning and data analytics.
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Palantir’s AI Mission Command Capability and its Predictive Maintenance & Precision Sustainment Suite have been added to the Marketplace and are available to support critical missions across the Defense Department.
Palantir is scheduled to report first-quarter earnings on May 6.
Analysts surveyed by FactSet are expecting the company to post profit of 8 cents a share on $615.3 million in revenue. A year earlier Palantir earned 5 cents a share on $525 million of revenue.
TheStreet Pro's Stephen Guilfoyle has a good feeling about Palantir. He has said more than a few times that "this is one name I am investing in for the future generations of my bloodline."
Guilfoyle noted in his April 16 column that for the 12 months ended in late December, operating cash flow printed at $712 million, more than triple the $224 million of 2022, as free cash flow printed at $697 million, up from $184 million in 2022.
"Palantir is quickly becoming a cash-flow beast," he wrote.
The stock has already given up its 21-day exponential moving average and 50-day simple moving average, he said.
“Should the stock lose contact with that pivot, there is a very good chance that it moves to fill the gap created in early February,” he said.
“That would take the shares down to about $18 and test support at the 200-day [simple moving average] as it does. This is where I suspect the real support may lie.”
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