- PLTR rises 31% thanks to its excellent fourth quarter results.
- Palantir increases its commercial profits in the US by 70% year-on-year.
- Margins widen and profits increase 20% over the previous year.
- Management raises sales forecasts for the entire year.
The actions of Palantir (PLTR) They seem to have taken a 180 degree turn. It was worth almost a third more on Tuesday than on Monday, after the “Big Data” company soared following strong fourth-quarter earnings results. PLTR shares closed up 30.8% at $21.87, after the results were published late on Monday. Shares fell less than 1% after the close.
This performance has been the best PLTR shareholders have ever seen. It surpassed the previous record from January 22, 2021, which registered a rise of 25.4%.
Growing customer base and strong business profit growth They are making Palantir less dependent on government contracts. This change is causing the market to pounce on PLTR stock, as it now appears more likely that Palantir has an extremely long growth ramp ahead of it.
All three major US indexes rose on Tuesday as Treasury yields fell. The Dow Jones added 0.37%, while the S&P 500 closed up 0.23%. The Nasdaq Composite index rose 0.07%.
Palantir Earnings News
Palantir posted fourth-quarter earnings of $608.4 million, $5.6 million above the Wall Street consensus. Profits have grown almost 20% from a year agoand Palantir also met the earnings consensus with $0.08 in adjusted EPS (earnings per share).
The Business Profits increased 32% year-on-year to $284 million, but the real story is the US-specific trade gains. This last segment grew 70% year-over-year thanks to the explosion of Palantir's offering in the field of artificial intelligence (AI). US commercial customers increased 55% year-over-year.
The Government Profitsof $324 million, increased 11% from the previous year, while the total number of customers in the government and commercial segments grew 35%.
“The AI revolution is driving deal flow [de la plataforma de IA] at a level we did not expect until 2025,” wrote Dan Ives, an analyst at Wedbush Securities, who has a $25 price target on PLTR stock.
Even a notoriously skeptical analyst like Citi's Tyler Radke had to admit that Palantir had monopolized the situation. He raised his estimate of free cash movement for 2024 by 55%.
Margins were the icing on the cake for Palantir. The company reports an adjusted free cash flow margin of 50%, an adjusted operating margin of 34% and a GAAP profit margin of 15%.
Although first-quarter sales forecasts came in slightly below consensus, Palantir raised its full-year guidance to between $2.652 billion and $2.66 billion.
Frequently asked questions about the S&P 500
What is the S&P 500?
The S&P 500 is a widely followed stock index that measures the performance of 500 public companies and is considered a broad measure of the U.S. stock market. The influence of each company in the calculation of the index is weighted based on market capitalization. This is calculated by multiplying the number of listed shares of the company by the share price. The S&P 500 Index has achieved impressive returns: $1.00 invested in 1970 would have produced a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.
How are companies chosen to be included in the S&P 500?
Companies are selected by committee, unlike other indices where they are included based on established standards. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be equal to or greater than $12.7 billion. Other criteria are liquidity, domicile, market capitalization, sector, financial viability, listing time, and representation of the sectors of the United States economy. The nine largest companies in the index represent 27.8% of the index's market capitalization.
How can I trade the S&P 500?
There are several ways to trade the S&P 500. Most retail brokers and spread betting platforms allow traders to use Contracts for Difference (CFDs) to place bets on price direction. In addition, you can buy index funds, mutual funds and exchange-traded funds (ETFs) that track the price of the S&P 500. The most liquid of the ETFs is the London Stock Exchange ETF. The most liquid of the ETFs is State Street Corporation's SPY. The Chicago Mercantile Exchange (CME) offers futures contracts on the index and the Chicago Board of Options (CMOE) offers options, as well as ETFs, inverse ETFs, and leveraged ETFs.
What factors drive the S&P 500?
There are many factors that drive the S&P 500, but primarily it is the aggregate performance of its component companies, revealed in their quarterly and annual earnings reports. US and global macroeconomic data also contribute, influencing investor sentiment, which if positive, drives earnings. 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 companies largely depend. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
Forecast on Palantir
Prior to Tuesday's new high, Palantir stock was in a short-term bearish technical trend. This is because the trend of PLTR stock had been bearish since reaching a high of $21.85 on November 21 of last year.
The rally in PLTR stock price will now give the bulls hope of retesting the high volume zone between $23 and $29 of the company's first year of public trading, which lasted from 2020 to 2021.
In addition to the support of $21.85could also be considered the maximum of $20.24 on August 1, 2023. The stock is trading well above its 20- and 50-day simple moving averages (SMAs), and is likely to trade with increased volatility until those SMAs approach the current price action.
PLTR daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
