There has been some interesting market movement south of the border in the opening weeks of May 2023. Today, I want to zero in on a top technology stock that is listed on the New York Stock Exchange (NYSE). Palantir Technologies (NYSE:PLTR) is a Denver-based company that builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations. Let’s dive in!
Why did Palantir stock make a huge jump?
Shares of this U.S. tech stock have surged 26% week over week as of close on Tuesday, May 9. The stock has climbed 13% month over month and its shares have posted 49% growth in the year-to-date period. Investors who want to see more of Palantir’s recent performance can play with the interactive price chart below.
Palantir released its first-quarter (Q1) fiscal 2023 earnings on Monday, May 8. The company blew away analysts’ expectations and stated a case that it would be able to deliver profitability through to the end of the fiscal year. Understandably, this had investors and the broader market excited.
Here’s why I’m excited about the company’s long-term future…
This company offers investors exposure to the burgeoning artificial intelligence (AI) space. Moreover, it is a major player for the U.S. intelligence service. Investors should be excited about the prospect of this coming gorging on defence contracts if it can continue to make progress in this arena.
Palantir was founded in 2004 with the express intention of using PayPal’s advanced fraud recognition systems to assist in counter terrorism while “preserving civil liberties.” It boasts clients like the CIA, NSA, FBI, CDC, the Marine Corps, and other crucial elements of the U.S. national defence system.
In April 2023, the company launched Artificial Intelligence Platform (AIP). According to co-founder Alex Karp, “AIP will allow customers to leverage the power of our existing machine learning technologies alongside … large language models, directly in our existing platforms.” Practically, the platform can help businesses gather a full picture of their broad operations in real time.
AI leaps have captured headlines and the imagination of the public in recent months. Grand View Research recently valued the global AI market at US$136 billion in 2022. The report projected this market to expand at a compound annual growth rate (CAGR) of 37% from 2023 through to 2030.
Two more reasons I love Palantir stock today
In Q1 fiscal 2023, Palantir delivered its second straight positive quarter of positive GAAP (generally accepted accounting principles) net income of $17 million. Meanwhile, total revenue climbed 18% from the previous year to $525 million. The company’s U.S. revenue posted 23% growth to $337 million.
Beyond its exciting potential, this company boasts a phenomenal balance sheet at the time of this writing. In Q1 FY2023, Palantir reported adjusted free cash flow of $189 million, which represented a 36% margin. Moreover, it possesses cash, cash equivalents, and short-term U.S. treasury securities of $2.9 billion.
Investors should be intrigued by Palantir’s strong earnings-growth potential in 2023 and beyond. In Q2 fiscal 2023 the company is projecting revenue between $528 million and $532 million. Meanwhile, it forecasts adjusted income from operations of $118 million to $122 million and yet another quarter of positive GAAP net income.