Palantir’s Earnings: Strength in Commercial Applications Continues to Drive Sales

We maintain our $16 per share fair value estimate for narrow-moat Palantir after the firm kicked off fiscal 2024 with a set of strong financial results, largely in line with our prior estimates. Spearheading these results was continued momentum for the firm’s artificial intelligence platform, or AIP, a trend we see continuing, especially in the US commercial space. While we model robust top-line growth and margin expansion for Palantir, we remain unable to rationalize the market’s current valuation on the name. For context, our top line and profitability estimates for the upcoming two years are all above consensus, highlighting our view that Palantir stands to materially benefit from increased AI spending as a leader in the AI platform space. Despite the firm’s shares trading down after hours, we continue to view them as overvalued.