(Reuters) -Palantir Technologies (PLTR) on Monday raised its annual revenue forecast for the third time, betting on strong government spending and rising demand for its software services from companies looking to adopt generative AI technology.
The company’s shares rose about 8% in extended trading.
The data analytics company has benefited from a boom in GenAI technology as more companies turn to its AI platform, which is used for testing, debugging code and evaluating AI-related scenarios.
The company now expects 2024 revenue of between $2.805 billion and $2.809 billion, up from its previous guidance of $2.742 billion to $2.750 billion.
The company has been one of the biggest beneficiaries of a rally in AI-linked stocks, with shares up more than 140% so far this year. The index was added to the S&P 500 in September and has outperformed the index’s 20% gain since the beginning of the year.
It also increased its annual forecast range for adjusted operating income to about $1.05 billion to $1.06 billion. The company previously forecast $966 million to $974 million.
“The revenue growth, which is driven by demand for AI, flows through to the bottom line,” CFO David Glazer told Reuters.
Although companies are increasingly using Palantir’s services, a large portion of its revenue comes from government spending.
Palantir, whose services include providing governments with software that visualizes military positions, posted a 40% increase in U.S. government revenue in the third quarter, which accounted for more than 44% of its total revenue of $725.5 million.
Analysts on average had expected revenue of $701.1 million, according to data compiled by LSEG.
Palantir also posted its biggest profit ever, with net income of $144 million in the third quarter, CEO Alex Karp said in a letter to shareholders.
One of the largest investors in the Nordic region, Storebrand Asset Management, said last month it has sold its Palantir stakes over concerns that the company’s work for Israel could risk violating international humanitarian law and human rights .
The company also expects fourth quarter revenue to exceed expectations.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel)
