Why Are Palantir (PLTR) Shares Soaring Today

Adam Hejl /
2023/06/05 11:46 am EDT

What Happened:

Shares of data-mining and analytics company Palantir (NYSE:PLTR) jumped 6.13% in the morning session after the company announced that it won a competitive process to provide technology tools to the US Special Operations Command (USSOCOM). USSOCOM performs special missions like counter-terrorism and rescue operations, and Palantir's enterprise software will help USSOCOM make sense of the huge amounts of data that it generates to improve decision making. The contract, which spans multiple years, has a potential value of $463 million. Additionally in the release, Palantir spoke about its ongoing innovation efforts by highlighting "...advancements in Large Language Models (LLMs) to reduce cognitive load on warfighters and commanders; as well as advancements in edge processing and edge AI to maximize the warfighter's ability to integrate and utilize real-time information."

What is the market telling us:

Palantir's shares are very volatile and over the last year have had 47 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 28 days ago, when the stock gained 15.1% on the news that the company reported first-quarter results that beat analysts' revenue, free cash flow, adjusted EBITDA, and earnings per share estimates. Customer growth also came in strong, rising by 41% year-over-year and 7% sequentially. However, revenue guidance for the next quarter came in below Consensus. Despite this, management noted that the company is expected to remain profitable every quarter through the end of the year. Additionally, the company provided some updates on the adoption of its AI technology, stating that "the depth of engagement with and demand for Palantir's new Artificial Intelligence Platform (AIP) is without precedent." Overall, the company's Q1 results continued to highlight the improvements in cash management and profitability.

Palantir is up 142% since the beginning of the year. Investors who bought $1,000 worth of Palantir's shares at the IPO in September 2020 would now be looking at an investment worth $1,630.

Is now the time to buy Palantir? Access our full analysis of the earnings results here, it's free.