Palantir Stock Is Soaring. Is It a Top AI Stock to Buy Now?

It’s been over a year since the AI revolution took hold with the launch of ChatGPT, and Palantir (NYSE: PLTR) has emerged as one of the winners.

The data analytics company, known for helping large government agencies and corporations sort through large amounts of data, saw its stock surge 167% last year as it turned profitable and launched its new Artificial Intelligence Platform (AIP).

Investors were cheering its fourth-quarter earnings report on Monday as the company delivered a strong round of results.

Palantir reported 20% revenue growth to $608.4 million, ahead of the consensus at $602.4 million. Once again, the company delivered strong profitability with its fifth straight quarter of profitability according to generally accepted accounting principles (GAAP), coming in at $93 million, or a 15% profit margin.

The company experienced particularly strong growth in its U.S. commercial segment, where revenue was up 70% to $131 million, making up nearly a quarter of total sales. U.S. commercial total contract value jumped 107% to $343 million, and for 2024, it forecast 40% growth in U.S. commercial revenue to at least $640 million, showing that companies are starting to adopt AIP.

On the bottom line, adjusted earnings per share doubled to $0.08, beating analyst estimates, as the company nearly held operating expenses flat once again, and guidance was solid as well.

For 2024, management expects revenue of roughly $2.65 billion, which represents 19% growth, an acceleration from 17% in 2023. It also called for adjusted income from operations of $834 million to $850 million, or a margin of 32%.

Palantir’s momentum is building

On the earnings call, management had no shortage of enthusiasm for the business and the demand it’s seeing from artificial intelligence (AI).

CEO Alex Karp explained in his shareholder letter that the power of large language models and natural language processing is rendered virtually useless without a system “to interact with…