As Palantir Technologies, Inc. (PLTR) gears up for its fiscal year 2024 fourth-quarter results, scheduled for release on Monday after market close, retail sentiment surrounding the stock remains notably optimistic. This enthusiasm is bolstered by a growing belief in the company's potential, particularly in the realms of artificial intelligence (AI) and government contracts.

 

Promising Earnings Projections

Wall Street analysts are anticipating robust performance, forecasting fourth-quarter non-GAAP earnings per share (EPS) of $0.11 and revenue of approximately $781.24 million, according to Yahoo Finance. This marks a significant increase compared to the previous year’s figures of $0.08 EPS and $608.35 million in revenue. Moreover, these projections indicate a solid uplift from the prior quarter's performance, where Palantir reported an EPS of $0.10 and revenues of $726 million.

 

In early November, the company provided guidance that hinted at quarterly revenue between $767 million and $771 million, alongside adjusted operational income projected to be between $298 million and $302 million. Given Palantir's history of surpassing expectations—both in terms of revenue and earnings—in each of the last four quarters, investor confidence appears well-placed.

 

Focus on Revenue Streams

When Palantir unveils its quarterly results, investors will likely keep a close watch on both U.S. commercial revenue and the company's commentary regarding its government contracts. The administration under President Donald Trump is perceived positively for Palantir, especially with the firm’s AI capabilities aligning with current governmental priorities.

 

Notably, U.S. commercial revenue saw a staggering 54% year-over-year increase, amounting to $179 million and representing about 25% of total revenues. Likewise, U.S. government revenue surged 40% year-over-year to reach $320 million, accounting for 44% of total revenue.

 

Strategic Partnerships and Market Expansions

In December, reports emerged indicating that Palantir is exploring a collaborative venture with defense tech company Anduril to pursue Pentagon contracts. This strategic alliance aims to challenge the dominance of the established prime contractors in the industry, suggesting Palantir's aggressive posture in securing lucrative government contracts.

 

Analyst Upgrades and AI Potential

In late January, Wedbush analyst Daniel Ives upgraded Palantir's price target from $75 to $90, underscoring confidence in the company's AI initiatives. Ives described Palantir as the "Messi of AI," highlighting its potential to become a leading player in the burgeoning AI market, which is projected to see trillions in spending over the coming years.

 

He anticipates Palantir could reach over $1 billion in revenue from its U.S. commercial operations, particularly leveraging its proprietary AIP platform. Despite acknowledging a one-time stock-based compensation expense of $120 million expected in Q4, Ives views this as inconsequential to the company’s overall performance and maintains an 'Outperform' rating on the stock.

 

Retail Sentiment and Stock Performance

Recent data from Stocktwits indicates that retail sentiment regarding Palantir remains extremely bullish, with a sentiment score of 74 out of 100. While the message volume on the platform has stabilized, discussions reflect confidence in the stock's valuation, with some users predicting a potential climb towards the $100 mark. Others suggest a possible dip due to external factors, such as the Trump tariffs, but anticipate a "violent" rebound following the earnings announcement.

 

Palantir's stock has seen a resurgence following a low of $65.04 on January 10, closing at $82.49 on Friday—signifying a 9% gain for January alone. With a staggering 340% rise witnessed throughout 2024, investor enthusiasm for Palantir's AI capabilities continues to surge, setting the stage for a highly anticipated earnings report that could further influence market sentiment.