By Arsheeya Bajwa and Chavi Mehta
(Reuters) -Palantir signaled on Thursday its artificial intelligence offerings would aid growth in the last three months of 2023, after delivering a fourth straight quarterly profit on growing demand for its data analytics services from corporates.
The company's shares surged nearly 20% and CEO Alex Karp said the profit was the "most significant" in its 20-year history and it was now eligible for inclusion in the S&P 500.
Addition to the stock index usually unleashes a flood of demand for shares.
Palantir expects revenue to be between $599 million and $603 million in the fourth quarter, the midpoint of which was above analysts' estimates of $600.5 million, LSEG data showed.
The company is seeing strong interest in the "bootcamps" it launched in October to give clients access to its AI platform for one to five days, in a positive sign for future demand.
"By November-end, we're on track to conduct bootcamps with 140 organizations and half of those will take place in (that month)," Chief Revenue Officer Ryan Taylor told Reuters.
Users of Palantir's AI platform almost tripled in the July-September period, Taylor said.
Still, there were signs in third-quarter earnings that growth at its mainstay government-focused business was slowing.
Revenue from government clients grew 12%, below estimates and below the 15% growth recorded in the previous quarter. Palantir blamed budgeting constraints at the government level, but said it remains positive on demand in light of geopolitical tension.
The stock may not be able to maintain the gains unless Palantir shows differentiated generative AI technology, RBC (TSX:RY) Capital Markets analyst Rishi Jaluria said.
Palantir's commercial revenue, which includes corporates, rose 23% to $251 million, helping the company post a 17% rise in overall revenue that slightly beat estimates. Adjusted profit of 7 cents per share was in line with estimates of 6 cents.