Palantir : Lord of the Earnings

Hey Superheroes,

This week, all eyes are on Wall Street. 

Before diving into that, let’s touch on the Reserve Bank of Australia’s decision to keep the cash rate at 4.35%. Given that core inflation is still above the desired target, this move comes as no surprise despite recent drops in headline inflation.

With Trump winning the U.S. election and returning to the White House this Wednesday, the U.S. market has been buzzing. The S&P 500 hit a record high and Tesla shares surged more than 14% on Wednesday, adding a significant US$20 billion to Elon Musk’s net worth.

Wall Street’s earnings season is still in full swing. This week we saw earnings posted from companies like Palantir, Ferrari, Toyota and Airbnb.

Palantir’s Q3 earnings surpassing analysts’ expectations

Palantir (NYSE:PLTR) is known for its data mining, analysis software and Artificial Intelligence Platform (AIP).

Palantir’s share price jumped more than 200% so far in 2024. The company was added to the S&P 500 index this September.

On Tuesday, the company reported strong Q3 earnings, leading to a 20% surge in its shares price that day.

💯 100% Income Growth

Here’s how Palantir performed compared to what analysts expected:

• Revenue: US$726M vs. US$701M expected (↑3.57%)
• Earnings per share: US$0.10 actual vs. US$0.09 expected (↑11.11%)

In the meantime, Palantir’s net income rose significantly, doubling from US$71.5 million to US$143.5 million compared to Q3 last year. Year-over-year revenue growth also increased by nearly one-third.

🏛️ Biggest supporter: The U.S. government

Palantir CEO Alex Karp attributes the company’s strong growth to steady demand for “the most advanced AI technologies from the U.S. government and commercial customers”.

Now, let’s break down exactly how much government and commercial customers contributed to Palantir’s Q3 revenue.

Global government spending, particularly the higher-than-expected spending from the U.S. government, contributed 56% of Palantir’s total revenue. The number soared 40% from the same period last year to US$408 million.

In contrast, the company’s commercial customers missed expectations, coming in at $317 million compared to the anticipated $330 million.

💡 Future Momentum

Palantir expects its Q4 revenue to range between US$767 million and US$771 million, surpassing analysts’ projections of US$741.4million.

While Palantir’s confidence is clear, Wall Street analysts are less optimistic. They forecast a dip in share price to US$32.81 by next year, with nearly half of Bloomberg-tracked analysts advising investors to sell.

Can Palantir beat expectations once again and silence the critics next quarter? We’ll be watching closely and keeping you updated as Q4 unfolds.

🤫 Controversial Reputation

The controversy stems not only from analysts’ expectation but also from Palantir’s crucial role as a tech supplier in the AI arms race, particularly with its recent $100 million contract with the U.S military. 

Palantir’s CEO Alex Karp statement of seeking to “bring violence and death to U.S. enemies” also sparked criticism.

🔦  Some other things we’re shining the Spotlight on:

WIN WIN: Following Trump’s election victory, Elon Musk has even more reason to celebrate, as his $130 million bet on Trump is paying off. Tesla shares surged 14.8% on Wednesday, while shares of its rival, Shanghai-based EV maker Nio, fell 5.3%. 

PHARMACY GIANTS’ SHAKE-UP: ASX-listed Sigma Healthcare is continuing its merger with Chemist Warehouse, pushing its shares up 25.4% in the past five days. Sigma is looking forward to leveraging Chemist Warehouse’s retail expertise while strengthening the supply chain for its new partner.

$8.8M FINE: More controversy surrounds Mineral Resources CEO Chris Ellison as the company’s board reveals he used corporate assets for personal gain. Ellison has been fined $8.8 million, sparking an 8% drop in MinRes shares on Monday.

Keep up to date on the markets by following us on Instagram, @superheroau!