Palantir Technologies Inc. (NYSE:PLTR) saw its stock surge on Tuesday after the company raised its annual outlook, driven by continued strong demand for its artificial intelligence software.

During a call with analysts on Monday, Palantir CEO Alex Karp described the earnings report as a “historic” milestone for the company, which provides advanced data analysis tools to businesses and governments, including defense and intelligence agencies. Karp also emphasized the significance of the current geopolitical climate, stating, “The world is on the precipice of what could be a very severe set of violent interactions in the Middle East.”

Palantir increased its 2024 revenue guidance to a range of $2.74 to $2.75 billion, surpassing analysts’ expectations of $2.7 billion, according to Bloomberg data. The company also raised its outlook for adjusted operating income to a range of $966 million to $974 million, well above analysts’ projections of $882.9 million.

Following this announcement, Palantir’s shares soared as much as 13.8% in New York trading on Tuesday. This rally added to the stock’s impressive 40% gain for the year through Monday’s close.

In a letter to shareholders on Monday, Karp highlighted the critical role of Palantir’s military business. He stressed, “The strength and dominance of the US military must be preserved and defended,” noting that while this view should be widely accepted, it has become “radical and risky in certain circles of elite opinion.”

Karp also pointed to the transformative impact of Palantir’s AI platform, which was launched just over a year ago, noting that it has “already transformed” the company’s business.

Co-founded by billionaire Peter Thiel in 2003, Palantir has consistently emphasized its collaboration with the US government and its allies. The company’s software is now utilized across all branches of the US military and plays a significant role in developing the nation’s AI capabilities. Following the second quarter, Palantir reported that its trailing 12-month revenue from the US government surpassed $1 billion for the first time.

Palantir has also been expanding its commercial business. The company reported $307 million in commercial sales for the June quarter, up 33% from the previous year, aligning with analysts’ estimates compiled by Bloomberg. Government sales for the quarter reached $371 million, up 23% and exceeding analysts’ expectations of $346.6 million.

Palantir Beat Sales and Profit Estimates

Overall, Palantir’s quarterly sales rose 27% to $678 million, beating Wall Street’s estimate of $652.8 million. Net income for the June quarter increased to $134 million, far exceeding analysts’ forecast of $82.8 million.

“With these results, we maintain our eligibility for the S&P,” said Palantir Chief Financial Officer David Glazer in an interview on Monday, referring to the company’s potential inclusion in the S&P 500 Index—a milestone many investors are eagerly anticipating. “It’s the S&P’s call.”

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