Why Palantir Stock Jumped 36% in November

Shares of Palantir Technologies (PLTR -9.03%), the artificial-intelligence driven data analytics company, were on the move last month, climbing 36%, according to data from S&P Global Market Intelligence.

The stock benefited from a better-than-expected third-quarter earnings report at the beginning of November and continued to rise from there, helped by signs that interest rates could start to come down soon and indications of a broader recovery in the stock market.

The chart below shows the stock’s gains over the course of the month.

PLTR Chart

PLTR data by YCharts.

Palantir notches a big win

Palantir has attracted a lot of attention among investors in recent years as a way to play the AI boom, but its performance has been mixed as the stock is still down sharply from its peak in 2021.

In November, the company delivered strong gains largely on the back of its third-quarter earnings report, which included a profit under generally accepted accounting principles (GAAP) and drove the stock up 20.4% on Nov. 2 and another 5.1% on the following day.

Revenue in the quarter rose 17% to $558.2 million, beating expectations at $555.4 million, and adjusted earnings per share (EPS) jumped from $0.01 to $0.07, edging out the consensus at $0.06.

Investors seemed pleased that revenue continued to diversify away from the government toward the commercial side of the business as commercial revenue rose 23% to $251 million and U.S. commercial revenue was up 33% to $116 million.

Customer count also rose 34% with U.S. commercial customer count up 37% to 181. Management said it has seen growing demand for its new Artificial Intelligence Platform (AIP) in recent months, stoking the bull case around AI adoption.

Later in the month, the stock continued to gain, trending with a broader increase in the market, though the stock pulled back on Nov. 21 after the company’s software contract with the U.K.’s National Health Services was lower than expected.

Can Palantir keep climbing?

Investors also cheered Palantir’s guidance: The company raised its full-year revenue forecast to a range of $2.216 billion to $2.22 billion, which was slightly ahead of the analyst consensus of $2.21 billion. It also called for adjusted net income of $607 million to $611 million, showing it continues to see strong adjusted profitability. It forecast another quarter of GAAP profits as well.

Palantir stock is still expensive, but there is considerable upside if it can capture the opportunity in AI.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.

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