Palantir Technologies Inc's (NYSE:PLTR) stock surged 14% in after-hours trading on the back of better-than-expected trading, which saw the tech giant raise its annual revenue forecast for the third time.
Demand for its services was driven by an increasing number of businesses adopting generative AI and increased government spending.
Palantir now anticipates 2024 revenue between $2.805 billion and $2.809 billion, up from its previous range.
This revision comes as the company's AI platform, used for testing and debugging, gains traction among commercial clients.
Palantir also raised its expected adjusted operating income to around $1.05 billion to $1.06 billion.
In the third quarter, US government revenue grew by 40%, accounting for over 44% of its $725.5 million total sales, surpassing analysts' predictions.
However, commercial sales are expected to overtake government contracts soon, as private businesses make faster purchasing decisions.
Fourth-quarter revenue guidance also exceeded analyst expectations, highlighting Palantir's momentum in the AI sector.
In a busy session, the stock was marked up $5.68 to $47.09, valuing the business at $95 billion.
"Palantir delivered another robust quarter featuring beats across the board as the company continues to see accelerated deal momentum with AIP [artificial intelligence platform] front and centre," said investment bank Wedbush, reiterating its 'outperform' recommendation.