Palantir earned after posting a pink forecast, touting demand for AI tools

(Bloomberg) — Palantir Technologies Inc. jumped as much as 21% in premarket trading on Tuesday after issuing a strong earnings forecast and saying demand for its new artificial intelligence engine this month was “unprecedented.”

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The company posted a surprise profit in the first quarter and expects continued losses for the rest of 2023, which will be the company’s first profitable year. But much of Palantir’s focus on Monday was on AI. In a video call with analysts, CEO Alex Karp said the data analytics firm is “running full” with AI technology and its strategy “is to take the whole market.” .

Palantir works with governments and corporations with sensitive networks, providing services that analyze information such as crime databases, DMV records or phone data to aid decision-making. “Every client needs an AI strategy,” says Karp. “We have unique software for that.”

On Monday, the company said it expected adjusted operating income to be between $506 million and $556 million in 2023. Analysts had predicted 496, 5 million dollars.

The company reported that revenue for the first quarter was $525 million, up 18 percent from last year. Analysts were expecting $506 million.

In a letter to shareholders, Karp emphasized the importance of the company’s move to AI. “We have had hundreds of conversations with potential partners about the software implementation and are currently negotiating terms and prices for access to the platform,” Karp writes.

But the details of the plan are still being prepared. On a Monday call with analysts, he said, “We don’t have a pricing strategy. We will create a lot of value. We’re going to have hundreds of customers and we’ll price it as we go.”

The CEO also warned that the risks posed by the latest and most advanced forms of AI are “real” and said that Palantir has designed its systems with privacy and safety in mind. of humanity comes first.

“The machine must always depend on its creator,” Karp wrote in his letter to shareholders.

Denver-based Palantir is best known for its outspoken billionaire co-founder Peter Thiel as well as the technology that powers defense, healthcare, and other operations for the United States and its allies. Palantir’s software also aggregates and analyzes data for companies including Airbus SE and Merck & Co.

The company’s AI push takes advantage of much of its previous work and comes relatively late compared to some of the tech giants. The field has become hugely popular over the past year, with major tech companies touting new services alongside startups funded with billions of dollars in venture capital.

With Palantir’s tools, a military customer could theoretically ask an AI system about opposing forces, ask the system to analyze information about those forces, and prompt the system to make recommendations. Hints on how to target your opponents. According to a video demonstrating the platform, those options could range from jamming communications to launching missiles. Palantir also offers AI computing at the edge, meaning it can embed autonomous decision-making on drones, planes, ships, satellites, and other terminals.

The first version of Palantir’s AI platform will only be made available to select customers this month, Karp said in the letter.

The company reported earnings per share of 1 cent for the first quarter. Analysts had expected a 1 cent loss for the period.

Palantir’s revenue from government business increased in the quarter. The revenue it received from the United States and other allies reached $289 million, an increase of about 20%. This is higher than analysts’ estimate of $285.6 million.

Palantir recently won an agreement with the US State Department to modernize data management for health services and with the Australian government to investigate financial crimes. The company will also assist Ukraine’s prosecutor general in the investigation of Russian war crimes.

The company’s commercial business, which has struggled to expand in recent years, posted revenue of $236 million this quarter. That’s an increase of about 15% year-over-year, exceeding analyst estimates of $219.8 million.

(Updated with premarket stock.)

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