Throughout much of this year, stock markets feared that the AI boom would hurt consulting and software companies. On Tuesday, that view abruptly reversed. Palantir (PLTR) and Gartner (IT) both soared after they posted quarterly results.
Palantir reported revenue of $1.94 billion, up by 94% Y/Y. In Q3, the firm forecast revenue of up to $2.164 billion, above the $2 billion expected. The earnings results demonstrated that semiconductor and cloud services companies are not the only beneficiaries of the AI boom. Palantir’s strong free cash flow and strong balance sheet boosted investor confidence.
Gartner jumped after building an uptrend in the last month. It posted Q2 revenue of $1.7 billion (+1.7% Y/Y). Free cash flow grew by 8.9% to $378 million. Gartner shares traded at a discount ahead of the results. The high cash flow yield suggests that IT stock has further upside ahead.
Zebra (ZBRA) traded at a 52-week high after reporting Q2 results. It earned $6.35 per share (non-GAAP). Revenue of $1.56 billion is up by 20.9% Y/Y. The stock jumped after the company raised its EPS range to $20.75 and $21.25 for the full year. This is up from a previous range of $18.30 to $18.70.
ZBRA stock attracted a short float of 6.59%. Consider waiting for the squeeze to end before starting a position.
