- PLTR stock has surged as much as 22% on Thursday following its Q3 earnings beat.
- Revenue and adjusted earnings in the quarter both beat consensus by a slight margin.
- Q4 outlook entices traders as revenue forecast is raised to a midpoint above $600 million.
- The artificial intelligence platform company grew its customer base by 34% from a year ago.
Palantir (PLTR) stock advanced a healthy 18% on Thursday after the artificial intelligence (AI) platform business slightly topped Wall Street consensus for the third quarter and issued an upbeat forecast for the fourth quarter. Shares rose as much as 22% in the morning session.
The price action is certainly upsetting some short sellers as Palantir stock was named by Goldman Sachs in mid-October as one of the most shorted stocks heading into earnings season.
The market on Thursday is continuing this week’s theme of a rebound following three months of a broad downtrend. The S&P 500, Dow Jones and NASDAQ Composite have each advanced above 1% into lunchtime.
Palantir stock earnings: Revenue outlook raised for Q4
Palantir earned $0.07 per adjusted share in the third quarter. That amounted to one penny above the Wall Street consensus.
Revenue also beat estimates at $558 million in the quarter, $2 million higher than the general forecast.
For the third quarter, Palantir witnessed a 23% YoY growth in revenue from commercial operations, its smaller segment. Its primary government business registered a more steady 12% sales growth figure.
The Colorado-based company raised its customer count by 34% from a year ago, demonstrating that its AI products are still seeing major uptake among new clients.
Palantir also raised its forecast for the fourth quarter, which is probably the primary reason the stock has rallied so much. The AI-inflected firm’s management said it expects revenue between $599 and $603 million, with the midpoint nearly $2 million above the prior consensus. Adjusted income from operations is expected to clock in at a midpoint of $186 million.
For the full year, Palantir expects revenue between $2.216 billion and $2.22 billion and adjusted income from operations at a midpoint of $609 million.
Nasdaq FAQs
The Nasdaq is a stock exchange based in the US that started out life as an electronic stock quotation machine. At first, the Nasdaq only provided quotations for over-the-counter (OTC) stocks but later it became an exchange too. By 1991, the Nasdaq had grown to account for 46% of the entire US securities’ market. In 1998, it became the first stock exchange in the US to provide online trading. The Nasdaq also produces several indices, the most comprehensive of which is the Nasdaq Composite representing all 2,500-plus stocks on the Nasdaq, and the Nasdaq 100.
The Nasdaq 100 is a large-cap index made up of 100 non-financial companies from the Nasdaq stock exchange. Although it only includes a fraction of the thousands of stocks in the Nasdaq, it accounts for over 90% of the movement. The influence of each company on the index is market-cap weighted. The Nasdaq 100 includes companies with a significant focus on technology although it also encompasses companies from other industries and from outside the US. The average annual return of the Nasdaq 100 has been 17.23% since 1986.
There are a number of ways to trade the Nasdaq 100. Most retail brokers and spread betting platforms offer bets using Contracts for Difference (CFD). For longer-term investors, Exchange-Traded Funds (ETFs) trade like shares that mimic the movement of the index without the investor needing to buy all 100 constituent companies. An example ETF is the Invesco QQQ Trust (QQQ). Nasdaq 100 futures contracts allow traders to speculate on the future direction of the index. Options provide the right, but not the obligation, to buy or sell the Nasdaq 100 at a specific price (strike price) in the future.
Many different factors drive the Nasdaq 100 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the Nasdaq 100 as it affects the cost of credit, on which many corporations are heavily reliant. As such the level of inflation can be a major driver too as well as other metrics which impact on the decisions of the Fed.
Palantir stock forecast
Palantir stock has made it above the $18 threshold early in the session. This is the price level where PLTR stock began experiencing resistance back in mid-October. A close above this $18 level will give bulls the chance of retesting the $20.24 from August 1.
Previous to August 1, Palantir stock last reached that level in December of 2021 during the covid rally. PLTR stock is still technically in a downtrend until the 9-day Simple Moving Average (SMA) breaks above the 21-day SMA. At the moment, there is a $1 space between the moving averages.
Since June, the $13.50 to $14 region has acted as strong support, so traders should not expect a decline below that price band in the near future.
PLTR daily chart
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