- 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 Technologies (PLTR) stock it attempting to hold onto its 20% gain on Thursday after the artificial intelligence (AI) software firm 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, dropped back around lunchtime, and are now doing their best to close above $18, up more than 20%.
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. CEO Alex Karp said during the earnings call that Palantir is now eligible for inclusion in the S&P 500 since it has maintained four straight quarters of profitability.
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 more than 1.5% in the last hour of trading.
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.
S&P 500 FAQs
The S&P 500 is a widely followed stock price index which measures the performance of 500 publicly owned companies, and is seen as a broad measure of the US stock market. Each company’s influence on the computation of the index is weighted based on market capitalization. This is calculated by multiplying the number of publicly traded shares of the company by the share price. The S&P 500 index has achieved impressive returns – $1.00 invested in 1970 would have yielded a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.
Companies are selected by committee, unlike some other indexes where they are included based on set rules. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be greater than or equal to $12.7 billion. Other criteria include liquidity, domicile, public float, sector, financial viability, length of time publicly traded, and representation of the industries in the economy of the United States. The nine largest companies in the index account for 27.8% of the market capitalization of the index.
There are a number of ways to trade the S&P 500. Most retail brokers and spread betting platforms allow traders to use Contracts for Difference (CFD) to place bets on the direction of the price. In addition, that can buy into Index, Mutual and Exchange Traded Funds (ETF) that track the price of the S&P 500. The most liquid of the ETFs is State Street Corporation’s SPY. The Chicago Mercantile Exchange (CME) offers futures contracts in the index and the Chicago Board of Options (CMOE) offers options as well as ETFs, inverse ETFs and leveraged ETFs.
Many different factors drive the S&P 500 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 S&P 500 as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
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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- Source: https://www.fxstreet.com/news/palantir-stock-forecast-pltr-price-surges-21-after-q3-earnings-beat-on-top-and-bottom-202311021434
