Palantir partners with Microsoft to offer AI solutions to U.S. defense and intelligence agencies.

• On Thursday morning, Palantir's shares rose by approximately 6% following the announcement of a partnership with Microsoft.
• The U.S. defense and intelligence communities will purchase secure cloud, analytics, and artificial intelligence capabilities from companies.
• During the second quarter, government clients accounted for 54% of Palantir's revenue.

On Thursday morning, shares of the company increased by approximately 6% after it was announced that the company had formed a partnership with to offer secure cloud, analytics, and artificial intelligence capabilities to the U.S. defense and intelligence communities.

Microsoft has partnered with Palantir to launch its software products, including Gotham, Foundry, Apollo, and AIP, on Microsoft's cloud products for government agencies.

Palantir exceeded LSEG consensus estimates by raising its annual revenue forecast to between $2.74 billion and $2.75 billion, from $2.68 billion to $2.69 billion.

In a letter to shareholders, CEO Alex Karp announced that the company's U.S. government business, which includes intel and defense agencies, generated over $1 billion in trailing 12-month revenue for the first time. Additionally, the company earned 54% of its revenue from government clients during the second quarter.

U.S. defense and intelligence organizations can utilize AI tools for action plans and logistics, among other things, through a partnership with Microsoft.

Microsoft will collaborate with Palantir, founded by billionaire Peter Thiel, to offer trial services and training sessions.

Palantir shares are up about 60% year-to-date.Subscribe to CNBC on YouTube.