Palantir Technologies Inc. (PLTR) has emerged as a significant player in the after-market movers’ list.

This widely tracked stock is often one of the most active during after-hours trading. With a minor drop of 0.05% in after-hours trading, the stock managed to close at $19.71, indicating a positive shift of 0.20%.

The post-market volume reached an astounding 4.78 million, contributing to a total volume of 74.877 million. The market capitalization of Palantir stands at an impressive $42.899 million, demonstrating a significant 144.67% increase in performance over the past year.

Palantir’s AI Focus and Commercial Adoption

Palantir’s AI Commitment

From its inception, Palantir has been unwavering in its commitment to artificial intelligence (AI). This dedication has positioned Palantir’s AI tools ahead of many competitors in the industry.

Such advancement was recognized when Dresner Advisory Services ranked Palantir No. 1 in their survey of AI, data science, and machine learning platforms.

AI Applications in Various Sectors

Palantir’s AI technology isn’t limited to any specific sector. It can be applied in diverse fields, including the government for military purposes, hospitals for dispatch, and companies for supply chain management.

The overarching goal of Palantir’s AI program is to process massive data inputs and provide optimal decision recommendations to its users.

The Introduction of AIP

The latest addition to Palantir’s technology suite is the artificial intelligence platform (AIP). This large language model enables users to interact with the software by asking questions.

This innovative approach further empowers customers to leverage Palantir’s AI technology and make informed decisions in real-time.

Palantir’s Commercial Success

U.S. Commercial Adoption

Palantir’s commercial success story has been a cornerstone of its investment thesis. This success is evident in the US stocks., where the company’s commercial adoption has grown substantially.

According to its latest quarterly conference call, the U.S. commercial business experienced a year-over-year growth of 52% and a sequential growth of 19%. Moreover, the U.S. commercial customer count increased tenfold in just three years.

Government Contracts vs Commercial Revenue

Despite the rise in U.S. commercial revenue, government contracts remain the major source of Palantir’s revenue, contributing to 55% of the total.

Comparatively, government revenue grew at a slower rate of 12% against commercial’s 23%, resulting in an overall growth rate of 17%.

Palantir’s Profitability and Stock Valuation

Profitability

Another essential factor to consider while investing in Palantir is its profitability. In the fourth quarter of last year, Palantir posted its first GAAP earnings per share (EPS) profit, and Q3 of this year marked the first time Palantir delivered EPS greater than $0.01.

Although Palantir’s $0.03 per share profit isn’t substantial, it indicates the company’s steady commitment to enhancing its profitability.

Stock Valuation

The growing profitability and hype surrounding AI have made Palantir’s stock an attractive option for investors, resulting in a high valuation.

However, regardless of the valuation method (earnings or sales), the stock is far from being cheap.

With Palantir’s revenue growth expected to slow down to 18% next quarter, it’s growing slower than its price-to-sales (P/S) valuation. This could be a concern for potential investors.

Financial Highlights from Q3 2023

Net Income and Revenue

In the third quarter ended September 30, 2023, Palantir reported a GAAP net income of $72 million, reflecting a 13% margin. This was the fourth consecutive quarter of GAAP profitability. The company’s revenue grew 17% year-over-year to $558 million.

Commercial and Government Revenue

Palantir’s commercial revenue saw an impressive growth of 23% year-over-year to $251 million.

Specifically, U.S. commercial revenue grew 33% year-over-year to $116 million. On the other hand, government revenue experienced a slower growth rate of 12% year-over-year, amounting to $308 million.

Customer Count

The company’s customer count increased by 34% year-over-year. Notably, the U.S. commercial customer count grew by 37% year-over-year, increasing from 132 customers in Q3 2022 to 181 customers in Q3 2023.

In Conclusion,

While Palantir’s stock may appear expensive, it’s essential to remember that the company is at the forefront of AI technology, with considerable growth in U.S. commercial adoption and consistent profitability improvement.

These factors make it one of the after-market movers worth keeping an eye on.