Palantir Technologies shares are trading near all-time highs heading into its fourth quarter earnings report after the close of trading Monday, with analysts focused on the data-analytics group's profit and sales forecast for the coming year.
Palantir (PLTR) shares have added more than $150 billion in market value over the past year, with the stock rising some 365%, as investors bet on its potential to leverage AI technologies into its government and commercial-focused businesses.
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The Denver, Co.-based group, founded by the tech investors Peter Thiel and Joe Lonsdale, uses its artificial intelligence platform, known as AIP, to help clients pull together disparate collections of data into a single model that they then can use to build, train and deploy in their day-to-day processes.
AIP, alongside Palantir's legacy government business, which is tied in part to its work with the Central Intelligence Agency, is helping the group power an impressive profit surge while carving out a increasing share of the commercial-AI marketplace.
Analysts expect Palantir to post December-quarter earnings of 11 cents a share, up from 8 cents in the year-earlier period, with revenues rising 27.6% to around $776 million.
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Commercial revenue, which includes testing and reworking AI systems through the AIP Logic platform, plus so-called boot camps for companies that are scaling the new technology across their business processes, is estimated 11.6% higher at $317 million.
Palantir itself forecast December-quarter revenue in the region of $767 million to $771 million, and said its commercial revenue growth rate over the whole of 2024 would rise to 50%.
"Instead of trying to have 10,000 clients, all of whom hate you but can't give up your product, we want a smaller number of the world's best partners that quite frankly are dominating with our product," CEO Alex Karp told investors last autumn.
"We are not a commodity. We do not want our customers to be commodities," he added. "We want them to be individual titans that are dominating their industry or the battlefield."
"Palantir remains one of our top names to own in 2025 as its game-changing AIP strategy is quickly becoming a key foundational platform for enterprises heading down the AI-use-case path across verticals," said Wedbush analyst Dan Ives.
"New and existing customers across the commercial and federal landscapes are waiting in line to sign up for multiple aspects of the Palantir tech stack as the company introduces new valuable use cases to customers with more organizations seeking to drive efficiencies on the back of AI," he added.
Palantir could see Trump 'tailwind': Ives
Ives, who lifted his price target late last month by $15 to $90 a share with an outperform rating, sees 2025 revenue rising 22% to $3.43 billion with an adjusted profit margin of 83.24%.
He also sees the new administration of President Donald Trump, and its focus on AI investments, as an "additional tailwind" for the group.
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"The stepped-up AI investments now being seen under the Trump administration with Project Stargate should benefit Palantir on the government vertical as more focus within the Beltway heads down the strategic AI infrastructure buildout stage," Ives said.
"In essence, Palantir is in the sweet spot to benefit from a tidal wave of federal spending on AI," he added.
Palantir's stock-based compensation in focus
Beyond the group's fourth-quarter update and its 2025 outlook, investors are expected to focus on the group's stock-based compensation, which it launched in first-quarter 2024 to reward key employees.
Around 48 million in so-called stock-appreciation rights, issued by Palantir, remained outstanding at the end of the third quarter but were automatically converted to shares after the stock topped $70 per share in early December.
Ives at Wedbush sees a one-time impact of $120 million to Palantir's fourth-quarter bottom line, while Cantor Fitzgerald pegs it closer to $140 million.
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Investors are also likely to press the group on a Financial Times report last month that suggested it was forming a broad consortium of defense and tech companies, including OpenAI and SpaceX, that would bid for Pentagon contracts.
Palantir shares at last check were last marked 1.6% lower in early Monday trading and changing hands at $81.04 each, a move that would trim the stock's year-to-date gain to around 7.8%.
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