Palantir shares jump 23% to record on uplifting guidance
Palantir Technologies CEO Alex Karp appears on a Bloomberg television interview during the FoundryCon event in Palo Alto, California, on March 7, 2024.
David Paul Morris | Bloomberg | Getty Images
Palantir shares jumped 23% on Tuesday and headed for a record close after the data analytics software maker reported robust third-quarter results and issued uplifting revenue guidance.
The stock reached a high of $51.19, above the prior record of $45.14 reached last week. If the gain holds, it will mark the stock’s biggest jump since Feb. 6, when shares popped 30%.
Revenue climbed 30% to $726 million from a year earlier, topping the $701 million average analyst estimate, according to LSEG. Adjusted earnings per share of 10 cents beat the 9-cent average estimate.
Analysts at Deutsche Bank said in a report that “the beat was driven by better-than-anticipated US Government performance,” boosted by demand for artificial intelligence tools.
“Palantir is among a handful of infrastructure software companies that have started to meaningfully monetize generative AI, where its competitive positioning benefits from longtime investment and deep expertise in complex data integration, and particularly its reputation for data security built into its ontology,” the analysts wrote.
Net income of $143.5 million, or 6 cents per share, was up from $71.5 million, or 3 cents per share, in the same quarter a year ago. The company called for fourth-quarter revenue of $767 million to $771 million. Analysts surveyed by LSEG had been looking for $741.4 million.
Palantir is targeting more than $687 million in U.S. commercial revenue for the year, implying about 24% of the total.
Bank of America bumped its price target from $50 to $55 and maintained its buy rating.
“We continue to view the adoption of PLTR’s AI-enabled products and reach in its early days, as more companies realize the time, resource, and cost savings possible,” Bank of America analysts wrote in a note to investors. “In our view, Palantir’s moat as the differentiated agnostic AI-enabler is only growing with each new use-case carrying compounding unit economics.”
— CNBC’s Jordan Novet and Michael Bloom contributed to this report.
Technology
British regulators will soon announce competition remedies for the multibillion-pound cloud industry
Ofcom said it received evidence showing Microsoft makes it less attractive for customers to run its Office productivity apps on cloud infrastructure other than Microsoft Azure.
Igor Golovniov | Sopa Images | Lightrocket via Getty Images
LONDON — Britain’s competition regulator is preparing remedies aimed at solving competition issues in the multibillion-pound cloud computing industry.
The Competition and Markets Authority is set to unveil its provisional decision detailing “behavioral” remedies addressing anti-competitive practices in the sector following a months-long investigation into the market, two sources familiar with the matter told CNBC.
The sources, who preferred to remain anonymous given the investigation’s sensitive nature, said that the cloud market remedies could be announced within the next two weeks. The regulator previously set itself a deadline of November to December 2024 to publish its provisional decision.
A CMA spokesperson declined to comment on the timing of its provisional decision when asked by CNBC.
Cloud infrastructure services is a market that’s dominated by U.S. technology giants Amazon and Microsoft. Amazon is the largest player in the market, offering cloud services via its Amazon Web Services (AWS) arm. Microsoft is the second-largest provider, selling cloud products under its Microsoft Azure unit.
The CMA probe traces its history back to 2022, when U.K. telecoms regulator Ofcom kicked off a market study examining the dominance of cloud giants Amazon, Microsoft and Google. Ofcom subsequently referred its cloud review to the CMA to address competition issues in the market.
Why is the CMA concerned?
Among the key issues the CMA is expected to address with recommended behavioral remedies, are so-called “egress” fees charging companies for transferring data from one cloud to another, licensing fees viewed as unfair, volume discounts, and interoperability issues that make it harder to switch vendor.
According to one of the sources, there’s a chance Google may be excluded from the scope of the competition remedies given it is smaller in size compared to market leaders AWS and Microsoft Azure.
Amazon and Microsoft declined to comment on this story when contacted by CNBC. Google did not immediately return a request for comment.
What could the remedies look like?
The CMA has said previously in June that it was more minded toward considering behavioral remedies to resolve its concerns as opposed to “structural” remedies, such as ordering divestments or operational separations.
The watchdog said in a working paper in June that it was “at an early stage” of considering potential remedies.
Solutions floated at the time included imposing price controls restricting the level of egress fees, lowering technical barriers to switching cloud providers, and banning agreements encouraging firms to commit more spend in return for discounts.
One contentious measure the regulator said it was considering was requiring Microsoft to apply the same pricing for its productivity software products regardless of which cloud they’re hosted on — a move that would have a significant impact on Microsoft’s pricing structures.
CMA Chief Executive Sarah Cardell is set to hold a speech on Thursday at Chatham House, a U.K. policy institute. In an interview with the Financial Times, she defended the regulator’s track record on competition enforcement amid criticisms from Prime Minister Keir Starmer that the agency was holding back growth.
She is expected to outline plans for a review in 2025 into whether the CMA should more frequently use behavioral remedies when approving deals, the FT reported.
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Bitcoin breached the $95,000 level for the first time Wednesday evening as investors continued pricing in a second Donald Trump presidency.
The price of the flagship cryptocurrency was last higher by more than 3% at $97,646.68, according to Coin Metrics. Earlier, it rose as high as $97,788.00.
Shares of MicroStrategy, a bitcoin proxy, gained 3% in extended trading. Mining stocks rose as well, with Mara Holdings up 4%.
Bitcoin continues its march toward $100,000
Bitcoin has been regularly hitting fresh records this month on hopes that Trump will usher in a golden age of crypto, which would include more supportive regulation for the industry and a potential national strategic bitcoin reserve or stockpile.
It is widely expected to reach $100,000 this year and double by the end of 2025.
“Bitcoin’s price continues to be driven by a number of factors including improved liquidity conditions, increased institutional adoption, and a regulatory environment that has flipped from a headwind to a tailwind,” said Sam Callahan, an analyst at Swan Bitcoin.
Another Trump term also implies larger budget deficits, potentially more inflation and changes to the international role of the dollar – all things that would have a positive impact on the price of bitcoin.
Bitcoin has gained more than 127% in 2024.
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