FILE PHOTO: The Palantir logo is seen in this illustration created on August 3, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Palantir Technologies forecast fourth-quarter revenue above analysts' estimates on Monday, as the rapid adoption of artificial intelligence boosts demand for its data analytics services from businesses and governments.
The company's shares, which hit a record high in regular trading, were last up 1% in choppy extended trading.
The stock has more than doubled in value this year, outpacing the gains in the world's most valuable firm - Nvidia - and the benchmark S&P 500 Index, amid mounting concerns of an "AI bubble".
Palantir expects fourth-quarter sales of between $1.327 billion and $1.331 billion, compared with analysts' average estimate of $1.19 billion, according to data compiled by LSEG.
The forecast implies a slight deceleration in revenue growth to roughly 61%, from the third quarter's 63% jump - a "cause of concern given the stock's lofty valuation," said Blake Anderson, associate portfolio manager at Carson Group.
The stock trades at a whopping 12-month-forward price-to-earnings ratio of 246.2, compared with Wall Street darling Nvidia's 33.3, according to LSEG data.
D.A. Davidson analyst Gil Luria, however, said the results should be enough to meet the expectations required to keep shares at these "unprecedentedly high valuation levels".
The company, which last month announced a deal with Nvidia to use the AI chip leader's processors and software to help its customers speed up decisions, also raised its annual sales forecast to a range of $4.396 billion to $4.40 billion.
Palantir had earlier expected annual revenue of between $4.142 billion and $4.15 billion.
It recorded adjusted per share earnings of 21 cents in the third quarter, beating estimates of 17 cents. Palantir reported revenue of $1.18 billion for the quarter ended September 30, beating estimates of $1.09 billion.
Initially backed by the CIA, Palantir's results have also been buoyed by expectations of increased defense spending on its military-grade AI tools.
The U.S. Army has issued an official public memo directing all army organizations to use the company's 'Vantage' platform, chief technology officer Shyam Sankar said on a post-earnings call.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sriraj Kalluvila)
