Palantir raises annual revenue forecast on AI demand but investors unimpressed
Palantir Technologies raised its annual sales forecast on Monday, although its inline profit and a modest revenue beat disappointed investors who were expecting more from the AI-focused data and analytics firm, driving its shares down 8 per cent in extended trading.
The stock has been one of the biggest gainers of a rally in AI-linked shares, rising more than 60 per cent this year, as investors placed huge bets on its ability to benefit from widescale AI deployments and increased government spending on defense-related tech.
"The only thing that's higher than the results reported were expectations, and that's why the stock is down," said D.A. Davidson analyst Gil Luria. "Investors expected even more."
Palantir reported adjusted profit of 13 cents per share for the first quarter that was in line with analysts' average estimate, according to data from LSEG.
The company reported revenue of $883.9 million for the period, just about 2.4 per cent above the estimates of $862.8 million.
"Investors were hoping for fireworks, not just results. Maybe a ... 10 times revenue beat," said Michael Ashley Schulman, chief investment officer of Running Point Capital.
For fiscal year 2025, the Denver, Colorado-based company now expects revenue in between $3.89 billion and $3.90 billion, up from its earlier forecast of sales between $3.74 billion and $3.76 billion. Analysts on average expect $3.75 billion in annual sales. It also forecast second-quarter revenue above estimates.
Co-founded by tech billionaire Peter Thiel, a significant portion of the company's revenue still comes from its services for governments, such as supplying software that visualizes the position of troops in a battle.
The U.S. government represented more than 42 per cent of revenue in the three months ended March 31.
Big U.S. government contractors such as Accenture and IBM have flagged a hit from cost-cutting efforts by President Donald Trump's administration mostly through the Department of Government Efficiency.
During an interview with Reuters, Palantir's executives did not directly address questions on whether DOGE spending cuts, spearheaded by billionaire Elon Musk, would impact the company's contracts.
"Focus on efficiency is excellent for Palantir. We very much support a push by the U.S. government to push on efficiency across the government," finance chief David Glazer told Reuters.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
an hour ago
- Business Times
Indonesia expects to conclude free trade talks with EU by end of June
[JAKARTA] Indonesia said on Saturday that free trade negotiations with the European Union, which have been going on for nine years, are expected to finish by the end of June. Airlangga Hartarto, the chief economic minister for South-east Asia's biggest economy, met with EU Commissioner for Trade Maros Sefcovic in Brussels on Friday. 'Indonesia and the European Union have agreed to conclude outstanding issues and we are ready to announce a conclusion of substantial negotiations by the end of June 2025,' Airlangga Hartarto said in a statement. He did not disclose details about what agreements may have been reached. Representatives for the EU in Jakarta did not respond to a request for comment. The EU is Indonesia's fifth biggest trade partner, with total trade between the two reaching US$30.1 billion last year. Indonesia had a US$4.5 billion trade surplus, Airlangga said. Indonesia and the EU have previously disagreed on the EU's trade rules for products with potential links to deforestation which could affect Indonesian palm oil, as well as Jakarta's ban on exports of raw minerals. Indonesian officials have been motivated to accelerate talks on free trade agreements, keen to diversify the country's export destinations as they deal with US tariff challenges. Seeking to end US trade deficits worldwide, US President Donald Trump announced sweeping 'reciprocal' tariffs that have since been paused until July. Indonesia is facing a 32 per cent tariff rate. REUTERS
Straits Times
3 hours ago
- Straits Times
US judge approves settlement allowing NCAA schools to pay athletes
The approval resolves long-running litigation between the NCAA and student athletes. PHOTO: REUTERS NEW YORK – A United States judge on June 6 granted final approval to a US$2.8 billion (S$3.6 billion) settlement with the National Collegiate Athletic Association (NCAA) that will allow schools for the first time to compensate student athletes for past and future commercial use of their names, images and likenesses. The settlement, approved in a ruling by US District Judge Claudia Wilken in the Oakland, California, federal court, resolves long-running litigation between the NCAA and student athletes. 'Despite some compromises, the settlement agreement nevertheless will result in extraordinary relief for members of the settlement classes,' Wilken wrote. She also said that the deal will 'permit levels and types of student-athlete compensation that have never been permitted in the history of college sports'. The ruling marked a 'historic day for college sports and the rights of athletes', the lead attorneys for the plaintiffs, Steve Berman and Jeffrey Kessler, said in a statement. In a statement, NCAA president Charlie Baker welcomed the judge's ruling. 'Student-athletes will benefit from the rich opportunities they enjoy now, plus far more scholarship opportunities, landmark financial benefits and a streamlined NCAA to support them,' he said. The NCAA denied any wrongdoing in agreeing to settle. The deal faced dozens of objections that it did not adequately compensate athletes or was unfair in other ways. Objectors to the deal now can appeal to the San Francisco-based 9th US Circuit Court of Appeals. The settlement, covering hundreds of thousands of current and former students since 2016, resolved three lawsuits that claimed NCAA rules barring payments to athletes violated US antitrust law. The US$2.8 billion will cover past damages. The plaintiffs' lawyers previously estimated the deal would provide tens of billions of dollars to class members over the next 10 years. Schools will be allowed to pay athletes from funds that universities receive from broadcasts and other commercial sources. The NCAA in April convinced a federal judge in Manhattan to dismiss a lawsuit seeking compensation for thousands of former student athletes who played team sports in college prior to 2016. Those students have filed an appeal. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
4 hours ago
- Straits Times
Japan trade negotiator Akazawa says he made progress in US tariff talks
The latest round of talks may be the last in-person meeting between Japanese and US officials before the upcoming Group of Seven leaders summit. PHOTO: REUTERS Japan trade negotiator Akazawa says he made progress in US tariff talks TOKYO - Japan had made some progress in a fifth round of trade talks with US officials aimed at ending tariffs that are hurting Japan's economy, Tokyo's chief tariff negotiator said. 'Tariffs have already been imposed on autos, auto parts, steel and aluminium, and some of them have doubled to 50 per cent along with 10 per cent general tariff. These are causing daily losses to Japan's economy,' Mr Ryosei Akazawa, said in Washington on June 6 after talks with officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. Mr Akazawa declined to say what progress they had made. The latest round of talks may be the last in-person meeting between senior Japanese and US officials before the Group of Seven (G-7) leaders summit that starts on June 15, where US President Donald Trump is expected to meet Japanese Prime Minister Shigeru Ishiba. Japan also faces a 24 per cent tariff rate starting in July unless it can negotiate a deal with Washington. 'We want an agreement as soon as possible. The G-7 summit is on our radar, and if our leaders meet, we want to show what progress has been made,' Mr Akazawa said. 'Still we must balance urgency with a need to guard our national interests,' he added. In May, Japan's trade negotiator said US defence equipment purchases, shipbuilding technology collaboration, a revision of automobile import standards and an increase in agricultural imports could be bargaining chips in tariff talks. In a bid to reach an agreement with the US, Japan is also proposing a mechanism to reduce the auto tariff rate based on how much countries contribute to the US auto industry, the Asahi newspaper reported on June 6. Mr Akazawa said Japan's position has not changed and that the tariffs are not acceptable. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
