(Reuters) -Palantir Technologies on Monday raised its annual revenue forecast for the third time, betting on strong spending from governments and rising demand for its software services from businesses looking to adopt generative AI technology.
Shares of the company rose about 8% in extended trading.
The data analytics company has benefited from a boom in GenAI technology, as more companies turn to its AI platform, which is used to test, debug code and evaluate AI-related scenarios.
The company now expects 2024 revenue in a range of $2.805 billion to $2.809 billion, up from its prior expectation of $2.742 billion to $2.750 billion.
The company is among the largest beneficiaries of a rally in AI-linked stocks, with its shares up more than 140% so far this year. It was added to the S&P 500 in September and has outperformed the index’s 20% year-to-date gain.
It also raised its annual forecast range for adjusted income from operations to between about $1.05 billion and $1.06 billion. It earlier forecast $966 million to $974 million.
“Top line growth, which is driven by the demand for AI, (is) flowing through to the bottom line,” CFO David Glazer told Reuters.
While businesses are increasingly using Palantir (NYSE:PLTR)’s services, a large chunk of its revenue comes from government spending.
Palantir, whose services include providing software to governments that visualizes army positions, posted a 40% rise in U.S. government revenue in the third quarter, which made up more than 44% of total sales of $725.5 million.
Analysts on average had expected revenue of $701.1 million, according to data compiled by LSEG.
Palantir also recorded its largest-ever profit, with net income of $144 million in the third quarter, CEO Alex Karp said in a letter to shareholders.
One of the Nordic region’s largest investors, Storebrand Asset Management, said last month it sold its Palantir holdings due to concerns that the company’s work for Israel might put it at risk of violating international humanitarian law and human rights.
The company also forecast fourth-quarter revenue above estimates.