Palantir Technologies, co-founded by billionaire Peter Thiel, has raised its annual revenue forecast for the second time this year, now expecting revenue between $2.74 billion and $2.75 billion, surpassing previous estimates of $2.68 billion to $2.69 billion. This adjustment reflects the growing demand for its software services driven by the generative AI boom.

Palantir’s AI platform has become essential for testing, debugging code, and evaluating AI-related scenarios, allowing the company to meet the surging demand for generative AI technology development. The company also raised its annual revenue expectation from U.S.-based companies by $11 million, now estimating $672 million.

Chief Revenue Officer Ryan Taylor stated that Palantir is facilitating growth by assisting companies in overcoming the significant bottleneck between AI application prototypes and deployable finished products.

Despite a 39% increase in shares during 2024, Palantir’s stock experienced a nearly 9% drop last week following earnings reports from major tech firms like Microsoft, which suggested that returns from substantial AI investments might take longer than anticipated.

The company projects third-quarter revenue between $697 million and $701 million, exceeding analysts’ average estimate of $679.1 million.

Palantir is actively working to reduce its reliance on government clients, which accounted for approximately 54% of total sales in the second quarter. CEO Karp noted that for the first time, the trailing twelve-month revenue from the U.S. government business surpassed $1 billion.

Palantir, known for providing software to visualize military positions, reported a 33% revenue growth from corporate clients in the last quarter.

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