Palantir Earnings Preview: Palantir's Share Price Increases by 6% Prior to Quarter Results

Palantir will release their Q1 results after Monday’s market close. Wall Street expects earnings per share of $0.08 with revenue anticipated to hit $617.6 million – US corporate customer growth and revenue being of particular focus.

Palantir (PLTR) stock is widely expected to exceed Wall Street expectations when they report first quarter results after close on Monday, May 6. That has likely contributed to its recent increase of value of around 6% at session open this week.

At this writing, PLTR stock had gained more than 6% to $24.80 as the NASDAQ and S&P 500 both advanced 0.6%. As earnings season starts up this week on Wall Street, many will anticipate quarterly reports from smaller growth stocks such as Rivian (RIVN), Coupang (CPNG), Uber Technologies (UBER), AirBNB (ABNB), Affirm (AFRM), Roblox (RBLX) and DataDog (DDOG).

Wall Street analysts anticipate Palantir earning $0.08 per adjusted share on revenue of $617.6 million during Q1. This projection underscores management’s ability to deliver marginal increases in profitability as it prioritizes revenue expansion over cost savings.

Revenue forecast would show an expected 17.6% year-on-year sales gain for the quarter ending March.

Recent quarters have witnessed management’s efforts to market its successful data analysis products from government to the private sector, but their fate may depend on growth among US corporations in their most recent quarter.

Palantir’s Artificial Intelligence Platform aimed at corporate customers will also play a critical role during its earnings call.

“T-Systems’ commercial business has seen strong acceleration, particularly in the US market as demand for their AI Platform remains strong,” wrote HSBC analysts in their client note last week.

“Tonight will be about hearing about AIP customer conversion rates, US commercial strength momentum and large deals in the pipeline,” according to star analyst Dan Ives from Wedbush Securities. Ives currently has an ambitious $35 price target on PLTR stock.

Some analysts have also expressed displeasure with Palantir’s long-term contracts with government clients and its often uncertain revenue projections from those contracts, often reported “lumpily”. For instance, in March Palantir signed an $178 Million deal with US Army as part of creating new targeting system for them.

AI Stocks FAQs
Artificial intelligence, or “AI,” is an academic field dedicated to artificially recreating human cognitive functions such as logic understanding, perceptions and pattern recognition in machines. Commonly abbreviated as AI, this field encompasses artificial neural networks, machine learning/predictive analytics/symbolic reasoning/deep learning as well as natural language processing/ speech recognition/ image recognition/ expert systems etc – ultimately the aim is the creation of artificial general intelligence or AGI which means producing machines capable of solving any random set of problems without prior training being provided or required of humans being present – the overall goal being AGI is the ultimate aim – by producing machines capable of solving untaught issues which they were previously trained or taught before being.

AI can serve many different uses; among the more widely known are generative AI platforms that use training on large language models (LLMs) to answer text queries – these platforms include ChatGPT and Google Bard platforms. Midjourney is an innovative program which creates striking images based on text entered by users. Other AI uses probabilistic techniques to assess quality or perceptions, like Upstart’s lending platform which employs an AI-augmented credit rating system to quickly assess applicants for loans based on data related to their career, wealth profile and relationships gathered online. Other types of AI utilize large databases from scientific studies to generate ideas for potential pharmaceutical drugs to be tested in laboratories, while YouTube, Spotify, Facebook and other content aggregators use AI apps to personalize user viewing habits by collecting and organizing user viewing habits data.

Nvidia (NVDA), is a semiconductor company known for providing artificial intelligence-specific computer chips and platforms used by AI engineers when building applications. Many proponents consider Nvidia the cornerstone of AI revolution as it creates the tools required for further applications of artificial intelligence. Palantir Technologies (PLTR), on the other hand, is an “big data” analytics provider with deep expertise. Contracts have been awarded with US intelligence community agencies that use its Gotham platform to sift through data and identify intelligence leads or pattern recognition issues. Microsoft (MSFT) holds an interest in ChatGPT creator OpenAI; ChatGPT was not publicly listed but integrated its technology with Bing Search engine by MSFT. OpenAI’s technology was integrated by MSFT for use as part of Bing’s predictive analytics capability and anomaly discovery services. Microsoft (MSFT) holds a large stake in OpenAI which powers ChatGPT but remains private despite investment from MSFT; OpenAI was built using their technology integrated by MSFT into Bing’s search engine technology platform. Microsoft (MSFT) holds large stakes in ChatGPT creator OpenAI which remains private while it integrates OpenAI’s technology within Bing search engines like Bing search.

Following ChatGPT’s release to the general public in late 2022, many stocks associated with AI quickly began a steady upswing; Nvidia in particular saw its stock leap over 200% over six months following its debut. Wall Street pundits began to speculate whether Wall Street had fallen prey to another tech bubble. Renowned investor Stanley Druckenmiller has held significant investments both with Palantir and Nvidia and noted that bubbles typically last six months at most. He suggested that, should AI-related enthusiasm turn into an asset bubble, its extreme valuations might last two and a half years or longer like those seen during the DotCom bubble in late 1990s. By mid-2023, our best estimate would indicate that market is currently not experiencing such extreme valuations and thus it cannot be considered in bubble territory for now. At that point, Nvidia traded at 27 times forward sales; however, analysts predicted substantial revenue growth going forward. At its height during the DotCom bubble years later it traded at 60x earnings while as recently as mid-2023 it traded at 25 times earnings.

Palantir stock forecast
The Moving Average Convergence Divergence (MACD) indicator recently made a bullish crossover, signalling two areas on which bulls should focus.

First is the $25.50 resistance from February and then $27.25 resistance from early March’s range highs.

At $21.85 and $20.84 are two key support levels that could prevent further declines during afterhours trading; without at least breaking above this price level after the close, expect PLTR’s Relative Strength Index (RSI) readings to approach overbought levels and trigger pullback.

But given PLTR stock is trading above its 20, 50 and 100-day Exponential Moving Averages (EMAs), shares appear poised for an upside momentum surge.

Daily chart of PLTR