May 5 (Reuters) - Data and analytics firm Palantir

Technologies ( PLTR ) raised its annual sales forecast on Monday, betting

on strong demand for its products that help businesses adopt

generative AI technology.

Palantir ( PLTR ) has benefited from a boom in the adoption

of GenAI technology as enterprises leverage the company's

expertise in managing and analyzing data to help train and run

new AI apps using its platform.

The Denver, Colorado-based company now expects revenue in

fiscal year 2025 between $3.89 billion and $3.90 billion, up

from its earlier forecast of sales between $3.74 billion and

$3.76 billion. Analysts on average expect $3.75 billion in

annual sales, according to data from LSEG.

Palantir's ( PLTR ) shares are up more than 60% this year, widely

outperforming the benchmark S&P 500 Index, which is down more

than 3%, as investors expect the company to benefit from AI

deployment and government spending on defense-related tech even

as global markets falter because of trade-related uncertainties.

Co-founded by tech billionaire Peter Thiel, Palantir ( PLTR ) has

been increasingly diversifying into commercial applications as

it works to reduce its dependence on government spending.

Palantir ( PLTR ) now expects U.S. businesses to drive more than

$1.18 billion in sales this year, up from its earlier

expectation of more than $1.08 billion. It also forecast

second-quarter revenue above estimates.

Still, a significant portion of Palantir's ( PLTR ) sales is led by

its services for governments, such as supplying software that

visualizes the position of troops in a battle. The company's

early financial backers included the CIA's venture arm,

In-Q-Tel.

The U.S. government represented more than 42% of revenue in

the three months ended March 31. Total sales of $883.9 million

during that period beat estimates of $862.8 million.

Big U.S. government contractors such as Accenture ( ACN )

and IBM ( IBM ) have flagged a hit to their businesses from

cost-cutting efforts by President Donald Trump's administration

mostly through the Department of Government Efficiency.

During an interview with Reuters, Palantir's ( PLTR ) executives did

not directly address questions on whether DOGE spending cuts,

spearheaded by billionaire Elon Musk, would impact the company's

contracts.

"Focus on efficiency is excellent for Palantir ( PLTR ). We very much

support a push by the U.S. government to push on efficiency

across the government," finance chief David Glazer told Reuters.