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Like Groundhog Day, Palantir Technologies (PLTR +25%) surges to record highs once again following an impressive quarterly report, surpassing earnings and revenue estimates in Q4 and projecting sustained upward momentum in Q1 and FY25. Shares of the AI software developer, whose roots begin with the CIA, were already up +400% over the past year leading into Q4 numbers, pushing its forward earnings and sales multiples to sky-high levels of 158x and 50x, respectively. However, PLTR continues to release outstanding quarterly reports, showcasing the clear edge its AI software has over the field.

• PLTR has been enjoying a powerful AI-induced tailwind for several consecutive quarters. The company's bottom-line upside in Q4 marks its third straight beat, delivering adjusted EPS of $0.14, its best quarter of profitability since going public in late 2020. Similarly, revenue crushed consensus for the third quarter running, leaping by 36% yr/yr to $827.52 mln, a decent acceleration from the +30%, +27%, and +21% growth over the previous three quarters.
• U.S. commercial revenue has been underpinning PLTR's accelerating growth. In Q4, this business spiked by 64% yr/yr to $214 mln, a 10 pt jump from last quarter's growth. The company's AIP offering (AI platform) continues to fuel new customer acquisition, driving a nearly 400% jump in U.S. commercial customers compared to three years ago. Examples of why AIP is attractive to U.S. companies include helping telecoms decommission old network technologies and equipment and automatically load-balancing prescription fulfilment for pharmacies.
  • One of PLTR's goals for enterprises is to help build a self-driving company, allowing users to go from performing workflows to supervising AI agents. The company has begun working toward this goal, assisting a multinational bank to automate core back-office processes and working with a construction firm to automate risk identification across thousands of pages of technical documents.
• The foundational U.S. government business maintained its strength in Q4, expanding revenue by 45% yr/yr to $343 mln. On the flip side, PLTR's international commercial business continues to face modest headwinds, growing by just 3% yr/yr. Management mentioned that while it remains committed to capitalizing on opportunities in Asia and the Middle East, it is primarily focused on accelerating growth in its U.S. commercial business.
• As Chief Revenue Officer Ryan Taylor noted, the AI revolution continues, supporting PLTR's upbeat guidance. The company anticipates Q1 revs of $858-862 mln, a 36% jump yr/yr at the midpoint, and FY25 revs of $3.741-3.757 bln, representing a 31% increase yr/yr at the midpoint.

PLTR's excellent Q4 performance highlights the increasing appetite among U.S. commercial and government organizations to ensure they are not left behind in the current AI race. PLTR's results also bring to the forefront its competitive advantage. PLTR has been aggressively investing in certain AI infrastructure that provides an intermediate representation of a business that AI can interact with. PLTR always viewed chatbots as a dead end, noting that they require interaction to allocate inventory, onboard customers, etc., everything required to automate a business. This is where PLTR expects to win over the long term.