Palantir Surges as AI Demand Accelerates

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley, with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:23)
This is Bloomberg Tech, coming up. Palantir calls commercial demand otherworldly. We'll break down the data and AI companies' blockbuster earnings results. Plus, Apple exceeds $10 billion in annual sales in India for the first time last fiscal year. We'll discuss what's driving surging demand for its devices in that market. And Palo Alto Networks CEO Nikesh Arora joins us to discuss the next generation of AI-powered cyber defense. You're seeing stocks at all-time highs, and it's technology that's leading the way. Then as that 100 up for a fourth straight session, matching its run from the first week of June, and the S&P 500 is at all-time highs. There is a big technology earning story driving that, and that is Palantir. Today's big number, $380.1 billion. That's the market cap of Palantir right now. This is a big gain in the stock. The share is up 25% or so, on track for their best day since February 2024 Best day since February 2024 These are the key numbers, and it's the US commercial business that's really driving it. US commercial sales came in $764 million, up almost 150% year-to-date. Overall US revenue is strong, and the big takeaway is the outlook for the year. They're saying that sales will be $8.15 to $8.16 billion. That's a few hundred million dollars, even at the low end of the range, beyond the street's expectation. What's the biggest story? Let's stick with Palantir. Joining us now, Mariana Perez-Morra, Bank of America Securities, Aerospace and Defense Analyst, reiterates a buy on the stock with a price target of $255 a share.
What's so interesting is the US commercial business is partly being reflected right now.
But actually, if you look at some of the bigger contracts that they secured, they don't call it a backlog, but there is a long way to go, and there's a big opportunity. And I was reading your note, that's why you've upgraded a lot of your estimates.

**Mariana Perez-Morra** (2:21)
Yes.
The US commercial strength is just a result of what we have been discussing in the past. Palantir is positioned at the right place, at the right timing to benefit from actually being able to operationalize all this AI momentum and all this AI demand. And US is actually embracing that with the size of the contracts they are seeing is also very, very amazing. If you look at the trailing 12-month average spending per US customer, that is up like 67 percent. And it's not just new customers that are ramping faster, but also legacy customers that have been using this orchestration or ontology for a while that are ambitious, and they want to actually keep incorporating the benefits of AI into their businesses.

**Ed Ludlow** (3:09)
Right.
I always remind myself, what does Palantir do? Palantir makes AI-powered software that helps companies and governments either analyze their data, or make decisions on their data, or automate data-related processes. Right. Simple as that. But the takeaway and the story that Alex Carpenter and Palantir want to tell is owning the means of production in the AI context. Are they showing evidence that they're helping customers do that?

**Mariana Perez-Morra** (3:36)
Well, actually, when you meet at their conferences with customers, customers are really happy about it. And the reality is that they have tried. They have tried to just implement it themselves, and it's not that easy. Palantir has been orchestrating not only this data analytics platform, but how the decision making actually works with that, and all these human interaction with AI.
It's really hard to have that digitalized, and Palantir has been doing that for decades. So customers are happy about it, and customers are actually leaning into that opportunity.

**Ed Ludlow** (4:15)
Palantir's US growth, 115%.
Its international revenue is growing at 33%. But Europe is a story there, right? Europe's much slower, and Palantir continues to kind of express open frustration about that. What's going on in that market?

**Mariana Perez-Morra** (4:35)
I think what happened in Europe, in particular, I'm going to speak about what we do. We call Palantir from the aerospace and defense industry, and we're seeing that a lot. Post Ukraine, there is this urge for European countries to don't depend that much on US technologies. They don't need to, like, they need to actually have domestic solutions. So it's the two phases of sovereignty in my way, that is like actually trapping Palantir in the middle. Because while Palantir actually gives a really good sovereign AI platform for you to own your IP, for you to be able to benefit from both open models and frontier models, and actually have all those learnings for yourself and proprietary data on the other end of sovereignty.