Palantir experiences a 23% increase in stock price on optimistic outlook.

• On Tuesday, Palantir's shares increased by 23% and reached a record close following the release of strong third-quarter results and optimistic outlook.
• In September, the S&P 500 stock index welcomed a new data analytics software provider as a member.
• According to a report by Deutsche Bank analysts, the beat was due to better-than-expected performance of the U.S. Government.

On Tuesday, shares of the data analytics software maker experienced a 23% increase and were on track for a record close following the release of strong third-quarter results and optimistic revenue projections.

If the stock's gain holds, it will mark its biggest jump since Feb. 6, when shares popped 30%. The stock reached a high of $51.19, surpassing the previous record of $45.14 set last week.

LSEG reported revenue growth of 30% to $726 million, exceeding the average analyst estimate of $701 million, and adjusted earnings per share of 10 cents surpassed the 9-cent average estimate.

According to a report by Deutsche Bank's analysts, the US Government's better-than-expected performance drove the beat, with demand for artificial intelligence tools contributing to the boost.

The analysts noted that Palantir is one of a few infrastructure software companies that have successfully monetized generative AI, thanks to its long-standing investment and expertise in complex data integration, as well as its strong reputation for data security built into its ontology.

The company's net income increased from $71.5 million to $143.5 million, resulting in an increase of 6 cents per share compared to 3 cents per share in the same quarter last year. The company forecasts fourth-quarter revenue of $767 million to $771 million, which is higher than the analysts' expectations of $741.4 million.

Palantir aims to generate over $687 million in US commercial revenue this year, which represents approximately 24% of the total.

Bank of America raised its price target from $50 to $55 while keeping its buy rating.

"Palantir's moat as a differentiated agnostic AI-enabler is only growing with each new use-case, resulting in compounding unit economics, according to Bank of America analysts."

— CNBC's Jordan Novet and Michael Bloom contributed to this report.

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