Palantir Technologies (PLTR 1.87%) inventory has been in crushing type in the marketplace prior to now yr with good points of 182%, and synthetic intelligence (AI) has performed a important position in powering this red-hot rally.

For occasion, in February this yr, Palantir inventory shot up impressively after posting its fourth-quarter 2023 outcomes. Wall Street appreciated the corporate’s beat-and-raise quarter, which was pushed by the rising adoption of its Artificial Intelligence Platform (AIP) by industrial clients. And now, Palantir appears to have taken one other strong step to monetize the rising demand for AI software program platforms by partnering with cloud computing big Oracle (ORCL 1.22%).

Let’s take a nearer take a look at this growth and test how this transfer might be useful for Palantir traders in the long term.

Oracle’s cloud footprint may speed up the adoption of Palantir’s AI software program platform

Palantir and Oracle have partnered “to provide secure cloud and AI solutions aiming to power businesses and governments around the world.” More particularly, Palantir’s enterprise-focused knowledge analytics platform, often called Foundry, the government-focused platform Gotham, and the more and more common AIP (which permits industrial clients to deploy massive language fashions and different AI functions) will now be out there by means of Oracle’s cloud infrastructure.

It is price noting that Palantir’s AIP has been in strong demand of late. The firm has been conducting bootcamps in order that potential clients can perceive how the mixing of AI may enhance their operations. This technique has paid dividends. Palantir witnessed a 70% year-over-year enhance in U.S. industrial income within the fourth quarter of 2023, pushed by a 55% enhance within the buyer depend.

Meanwhile, its general industrial income elevated 32% through the quarter, with the client depend leaping 44% yr over yr. Palantir ended the quarter with 103 offers price no less than $1 million. That was a huge soar from the year-ago interval when it closed 55 offers price $1 million or extra. A partnership with Oracle may enhance Palantir’s deal exercise as the previous’s AI-focused cloud choices are actually in strong demand.

Oracle identified in its fiscal 2024 third-quarter earnings launch that it expects to “continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply.” This strong AI-related demand drove the corporate’s remaining efficiency obligations up by 29% within the earlier quarter to a document $80 billion, suggesting that the proliferation of AI helps Oracle construct a strong income pipeline.

It can be price noting that the 25% year-over-year development in Oracle’s cloud enterprise final quarter was quicker than the likes of Amazon Web Services and Alphabet‘s Google Cloud. The good half is that Oracle is trying to develop its knowledge heart capability and has outlined a capital expenditure price range of $10 billion to convey on-line extra capability.

The improved attain of Oracle’s cloud infrastructure ought to ideally be a tailwind for Palantir. Investors ought to notice that Oracle already has a strong footprint as its public cloud is out there in 48 areas throughout 24 international locations. The firm additionally has separate areas for the European Union and the U.S., the U.Okay., and Australian governments.

In all, this partnership may develop into a win-win for Palantir, contemplating that the adoption of AI within the cloud is about to develop quickly sooner or later. More particularly, the cloud AI market is predicted to clock an annual development charge of just about 36% by means of 2032. As such, it will not be stunning to see Palantir’s AI choices acquire extra traction going ahead.

Faster development might be within the playing cards for Palantir

We have already seen how AI is powering the expansion of Palantir’s industrial enterprise. Now, the broader availability of its AI options may assist speed up the corporate’s income and earnings development.

Palantir completed 2023 with a 17% enhance in income to $2.23 billion. Analysts are forecasting a 22% enhance in its income this yr to $2.71 billion. However, with the Oracle partnership now in place, the potential for Palantir rising at a quicker tempo than analysts’ expectations can’t be dominated out. If that occurs, the market may reward this AI inventory with extra upside, which is why traders ought to take into account shopping for extra of Palantir earlier than it heads greater following strong good points of 34% already in 2024.