Will Palantir Soar After Feb. 3? Here's What History Says.

In 2024, Palantir Technologies (NASDAQ: PLTR) proved that it's one of today's key technology leaders. The software company reported record profit, saw revenue climb quarter after quarter in the double digits, and was invited to join the S&P 500. Palantir ended the year with the best performance in that benchmark as the stock soared a mind-blowing 340%.

Today, though, some investors have been hesitant about getting in on Palantir at this stage of the story, as valuation has reached a high level from a forward price-to-earnings perspective. Still, if we consider Palantir's expected growth, this company on the move could make a great investment. Two revenue drivers, in particular -- artificial intelligence (AI) and the commercial customer -- may just be getting started.

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On top of this, a catalyst for Palantir is just around the corner on Feb. 3. Will Palantir stock surge after that date? Here's a look at what history says.

Image source: Getty Images.

The Palantir story so far

Before I get to that, here's a quick summary of the Palantir story. This software company isn't a new kid in on the block -- it's been around for more than 20 years. It only entered the stock market in recent times, launching an initial public offering (IPO) in 2020. Throughout its history, Palantir mainly has been associated with government contracts, but over the past few years, it's seen major growth from commercial customers.

Palantir's software platforms help its customers aggregate all of their data -- which often is disparate -- and use this data to make game-changing decisions, shape a strategy, and more. In 2023, Palantir launched its Artificial Intelligence Platform (AIP), harnessing the power of large language models and AI technologies in the data-driven decision-making process.

Demand for AIP has soared, and this may be in part due to Palantir's genius way of introducing the platform to potential customers. Palantir holds boot camps, or sessions to help a future customer go from zero to a use case in just a few hours.

As I mentioned above, AIP has been a key growth driver in recent quarters. It also has helped another trend gain momentum: the commercial customer's use of Palantir software. These customers have been flocking to Palantir, helping commercial revenue increase in the double digits from quarter to quarter. And U.S. commercial customer count, at only 14 just four years ago, has now reached about 300.

A record profit

All of this has helped Palantir reach a record net income of $144 million in the most recent quarter. Considering the general demand for AI solutions and the size of the current commercial customer base, it's likely that a lot more growth may be ahead for the company.

Now let's move on to the upcoming catalyst. On Feb. 3, Palantir will be reporting fourth-quarter earnings -- offering us a recent view of how these growth drivers are progressing. There's reason to be optimistic about what the company may say.

"This is the software century, and we intend to take the entire market," Palantir Chief Executive Officer Alex Karp wrote in his latest letter to shareholders. He's also spoken of "unrelenting" demand for AI systems.

What history says

A look at history should help when looking ahead at Palantir's potential post-earnings performance. Though trends don't always repeat themselves, they offer a guide as to possible likely outcomes. In the month following Palantir's past five earnings reports, Palantir stock has climbed four of those times. And the increases each have been in the double-digits, with the biggest being a 68% gain in the month following the third-quarter 2024 earnings report late last year.

Considering all of this, will Palantir soar after Feb. 3? As I mentioned earlier, some investors say Palantir is expensive, trading at 166x forward earnings estimates. But the company's forward PEG ratio of 0.3 -- below the level of 1 that indicates a stock is overvalued -- suggests the stock still makes a reasonable buy.

Palantir's solid earnings track record and demand for its software are positive points, too, and history shows us investors generally react positively after the tech-player's earnings reports. All of this means there's reason to be optimistic about Palantir stock scoring another win and soaring after Feb. 3.

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.