This article first appeared on GuruFocus.
Palantir Technologies Inc. (PLTR, Financials) had a solid August. It outperformed the rest of the technology industry.
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The shares rose 51.45% in the month vs a 6.36% gain in the broader technology group. It was simple: Palantir kept getting bigger and bigger.
Second-quarter sales was $1.94 billion, up 93% from a year ago, as demand for its artificial intelligence software quickened. The company also boosted its full-year revenue forecast to $8.15 billion-$8.16 billion.
Salesforce was the next best of the big names in August with a rise of nearly 40 per cent and Super Micro Computer increased by more than 31 per cent.
Palantir's surge highlights how fast investors have shifted back into software companies that can show AI is genuinely generating income. But 51% monthly gain is also a high bar.
Palantir has more to do than just expand strongly from here. It requires robust growth to justify expectations that have climbed nearly as swiftly as the share price.
The next test will be the third quarter, when Palantir aims to bring in around $2.16 billion in revenue.