Palantir rallies after bumper quarter fueled by US defense spending

By Kanishka Ajmera and Rashika Singh

Feb 3 (Reuters) - Shares of Palantir Technologies jumped 6.9% successful aboriginal trading connected Tuesday arsenic investors stake connected the company's military-grade AI tools and services aft ​it reported a surge successful quarterly sales, boosted by rising U.S. defence spending.

Denver, Colorado-based Palantir ‌is connected way to adhd astir $24.4 cardinal to its marketplace worth astatine the existent terms of $158, if gains hold. The banal ‌has risen 1,700% implicit the past 3 years.

The company, founded by tech billionaire Peter Thiel and with the CIA arsenic 1 of its aboriginal backers, said connected Monday that gross derived from the U.S. authorities jumped 66% successful the 4th fourth to $570 million, helping assistance full income to $1.41 billion, supra analysts' estimation of $1.33 billion.

The information analytics ⁠firm forecast first-quarter income supra estimates ‌and flagged a crisp surge successful income successful 2026, driven successful portion by authorities contracts.

"We judge that the increasing governmental tailwinds for reindustrialization and the strengthening of ‍American proviso chains supply a fertile backdrop for greenfield deployments of Palantir's efficiency-driving software," Morningstar analysts said.

Despite Tuesday's jump, Palantir shares are down astir 17% truthful acold this year, reflecting capitalist concerns implicit the company's lofty valuation. The banal trades ​at a guardant price-to-earnings ratio of astir 131.

The institution volition request to support its awesome show ‌to warrant its existent pricing, particularly arsenic aboriginal maturation comparisons go much challenging, analysts astatine Jefferies said.

KARP MOUNTS DEFENCE OF PALANTIR SURVEILLANCE TOOLS

CEO Alex Karp defended Palantir's surveillance technology, emphasizing it has safeguards to forestall authorities overreach.

He said the institution was "supporting successful a captious manner, immoderate of the astir interesting, intricate, antithetic operations that the U.S. authorities has been progressive in", but did not specify which authorities programs Palantir was progressive ⁠in.

Karp's remarks travel arsenic companies tied to U.S. Immigration and ​Customs Enforcement look increasing political, nationalist and capitalist scrutiny, pursuing ​backlash implicit the agency’s assertive tactics aft 2 fatal shootings of U.S. citizens successful January.

Some firms person moved successful caller weeks to region themselves from ICE contracts, citing reputational ‍and governance risks, including ⁠French IT steadfast Capgemini, which said this week it would merchantability its U.S. authorities services portion aft facing political, capitalist and idiosyncratic backlash implicit an ICE surveillance contract.