Palantir Technologies stock jumped 29.5% on Tuesday. The gain came after the company posted second quarter earnings that beat Wall Street estimates.
Shares came close to their best single day performance ever. The stock had gained 30.8% back on Feb. 6, 2024.
The enterprise software company reported revenue of $1.94 billion for the quarter. That marks a 93% increase from the same period last year.
Analysts had expected revenue closer to $1.8 billion. Palantir topped that estimate by a wide margin.
Commercial Revenue Leads Growth
Commercial revenue climbed 149% to $764 million. Government revenue also grew, rising 90% to $809 million.
Palantir raised its full year guidance. The company now expects revenue between $8.15 billion and $8.158 billion.
It also projects commercial revenue above $3.424 billion for the year. That would mark continued growth from current levels.
Palantir shares rose 16.3% in premarket trading before the market opened. The stock kept climbing once trading began.
CEO Points To AI Sovereignty Demand
CEO Alex Karp called the quarter "otherworldly" during an interview with CNBC. He said the company is benefiting from what he calls the AI sovereignty revolution.
Karp said companies want to keep control of their own data. He said many businesses are avoiding full reliance on outside AI labs such as OpenAI, Google, and Meta.
In a letter to shareholders, Karp wrote that customers have "declined to become vassal states of the language labs." He said organizations are aware of the risks of giving outside AI companies access to their systems.
Karp said no business at Palantir's scale has grown at this pace. He told CNBC to "forget consensus" when comparing the company's growth to others.
Palantir's stock had been down 29% for the year heading into Monday's close. Investors had grown cautious about AI related stocks in recent months.
Tuesday's rally erased much of that loss. Shares are now up about 1% over the past twelve months.
Citi analysts responded to the earnings report in a note on Tuesday. They said the results weaken the case around rising AI competition.
The analysts said demand for data privacy sets Palantir apart from other AI companies. They said this demand supports the company's commercial growth.
In an earlier note on Monday, Citi analysts said Palantir is benefiting from the same demand as the fastest growing AI companies. They said this reinforces the company's position in enterprise AI adoption.
The analysts said they expect the stock to move higher given the strength of the U.S. commercial results. They said the numbers push back against fears of slowing growth.
