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1 Stock That Just Soared 22% After Its Latest Earnings

TradingKeyFeb 4, 2025 8:17 AM

In the stock market right now, anything to do with Artificial Intelligence (AI) has an added advantage. That’s down to the phenomenal market rally that has ensued since Open AI and ChatGPT came on to the scene in late 2022.

However, certain companies in the US stock market – that are involved in AI – are also backing up the hype with tangible earnings growth. 

One of those companies is Palantir Technologies Inc (NASDAQ: PLTR). The big data analytics platform operator had a monster 2024, when its shares soared over 340% and it was also included in the S&P 500 Index.

Palantir reported its latest Q4 2024 results on Monday (3 February) after the market closed and investors were not left disappointed. Palantir stock surged more than 22% in after-hours trading on results that blew away Wall Street expectations.

TradingKey's Equity, Petar Petrov mentioned that Palantir Q4 results made investors hyped again.

The company beat the estimates for both revenue and EPS, and also provided a slightly better guidance for 2025Q1 and the full year of 2025. The stock has been trading 20%+ higher after the market hours:

  • Earnings per share: 14 cents adjusted vs. 11 cents expected
  • Revenue: $828 million vs. $776 million expected
  • 2025Q Guidance: $858-$860 million vs $799 million expected
  • 2025 Guidance: $3.74-$3.76 billion vs $3.52 billion expected

Petar also mentioned that the positive news for PLTR is that operation-wise, the company is doing great. The total customers’ growth is up 43%, without signs of slowing down. This brings an accelerated revenue growth of above 30% and it is quite certain that this pace of growth will be maintained throughout the coming quarters. The strength comes not only from the government segment but also from the commercial segment with commercial customer count growth of 52% year-over-year and 14% quarter-over-quarter.

This demonstrates that PLTR products provide a solid value proposition to businesses. TradingKey equity team believes, with riding the AI wave, it is possible to see Palantir overshadowing giants like Salesforce and Microsoft in the enterprise software business some day in the future.

However, TradingKey analysts also warn against the massively stretched valuations at this moment. Another point that investors should pay attention to is the gross margin, though being very high at ~80%, has been stagnant, implying a potential peak. 

Here’s what AI and growth investors need to know about Palantir’s latest numbers. 

Revenue Beat and Higher Guidance

Palantir’s big data analytics platform continued to post big numbers in Q4 2024 as the company reported revenue of US$828 million for the period, up 36% year-on-year and ahead of the consensus expectation for US$776 million.

That wide beat was also accompanied by some strong guidance for 2025. First, Palantir expects revenue of between US$858 million and US$862 million for the current quarter (Q1 2025) – way ahead of the average analyst estimate of US$799 million.

Second, Palantir management forecast full-year 2025 revenue to come in between US$3.74 billion and US$3.76 billion. That easily surpassed the US$3.52 billion average estimate for the whole year.

Government Revenue Proves Robust

In terms of the revenue breakdown, it was another strong quarter for the government side of the business as revenue from that unit hit US$455 million, up 40% year-on-year. It also proved that Palantir’s importance to the defence industry and exposure to rising defence spending in the US is a huge boon for shareholders.

Palantir Key Growth Metrics for Q4 2024

A screenshot of a cell phone

AI-generated content may be incorrect.

Source: Palantir Q4 2024 earnings presentation

Meanwhile, Palantir’s commercial business generated revenue of US$372 million, rising 31% year-on-year from the same period a year earlier.

While the company’s government unit is bigger, commercial revenue saw stronger growth for the whole of 2024 with that unit posting a whopping 64% year-on-year revenue growth figure for the full-year. That was in contrast to Palantir’s still-strong 45% year-on-year increase for government revenue for the whole of 2024.

Commoditised AI, a Positive for Palantir

While the broader stock market freaked out on the news of DeepSeek’s R1 AI model from China beating out ChatGPT and Gemini on reliability, Palantir sees the lower AI operating cost environment as a massive positive development.

According to Palantir’s Chief Revenue Officer, Ryan Taylor, “With the proliferation of AI models, the raw AI labour supply is exploding and while everyone is focused on the model supply side, we’re transforming AI into a measurable stream of high-value finished goods and services”.

The takeaway is that the AI models are getting commoditised and according to CEO Alex Karp, “They’re getting better across both closed and open, but they’re also getting more similar, and the price of inference is dropping like a rock.”

That’s sure to benefit Palantir over the long term given the amount of data it consumes and analyses. While Palantir stock is trading at a price-to-earnings (PE) of around 173x, this latest set of numbers is sure to provide more evidence to bulls that the company is set to be one of the big winners from the AI revolution.


Disclaimer: For information purposes only. Past performance is not indicative of future results.