Shares of Palantir (PLTR 22.33%) rose higher today after the artificial intelligence (AI)-focused software stock reported better-than-expected results in its third-quarter earnings report last night as revenue growth accelerated for the fifth consecutive quarter. It also saw strong margin expansion.

As of 10:02 a.m. ET, the stock was up 20.3% on the news.

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Palantir shines again

Palantir, known for its data fusion software that allows governments and companies to find and integrate data from multiple sources to create useful information, significantly beat revenue estimates this quarter, driven by strong growth in the U.S

Total revenue rose 30% to $725.5 million, well above the consensus of $701.1 million. U.S. revenue increased 44% to $499 million, which included a 54% increase in U.S. commercial revenue to $179 million and a 40% increase in U.S. government revenue to $320 million .

Powered by its new artificial intelligence platform (AIP), the company has now posted five consecutive quarters of accelerated revenue growth, demonstrating that it is establishing itself as a valuable software platform in the AI ​​age.

On the earnings call, CEO Alex Karp described large language models as commodity, but said institutions need the kind of tools Palantir provides to leverage their data.

The bottom line is that margins increased as business expanded. Palantir reported general accounting principles (GAAP) operating margins of 16% and adjusted operating margins of 38%. Adjusted earnings per share rose to $0.10 from $0.07, above the consensus of $0.09.

Karp said: “We absolutely crushed this quarter, driven by continued AI demand that shows no signs of slowing down. This is a US-driven AI revolution that has taken off.”

Can Palantir continue to grow?

Palantir has been one of the best performing stocks on the market this year, as shares have now nearly tripled.

Investors were also encouraged by the guidance increase, as Palantir now expects full-year revenue of $2.805 million to $2.809 million.

The stock is expensive, but the company is clearly benefiting from AI momentum. If sales growth remains strong, the stock still has plenty of upside potential from here.