NEW YORK – Palantir Technologies reported stronger-than-expected fourth-quarter earnings, buoyed by surging demand for its artificial intelligence (AI) and defense-related software solutions. The company’s shares increased by 5% in after-hours trading following the announcement.
The Denver-based software analytics firm posted adjusted earnings per share of 25 cents, surpassing the 23 cents forecast by Wall Street analysts. Revenue reached $1.41 billion, exceeding the expected $1.33 billion, representing a 70% increase from $827.5 million a year earlier. For the full fiscal year, Palantir’s total revenue stood at $4.48 billion.
Both government and commercial sectors contributed to the revenue growth, with U.S. government revenue rising to $570 million and commercial revenue to $507 million, both well above analyst estimates.
CEO Alex Karp praised the results, calling them “indisputably the best in tech in the last decade” during an interview with CNBC. He emphasized the importance of investing in AI-enabled tools to stay competitive, stating, “If you’re not spending it on this, you’re not spending on something that is part of keeping up with momentum.”
Looking ahead, Palantir provided optimistic guidance, projecting first-quarter revenue between $1.532 billion and $1.536 billion—well above the $1.32 billion forecast by FactSet. For fiscal 2026, the company anticipates revenue in the range of $7.182 billion to $7.198 billion, surpassing the expected $6.22 billion.
Growing Demand and Strategic Partnerships
Palantir’s growth has been fueled by increased adoption of its data and AI tools by government agencies such as the Department of Defense, the Internal Revenue Service, and the Department of Homeland Security. Notably, the company secured a potential up to $10 billion contract with the U.S. Army and a $448 million deal with the U.S. Navy to enhance shipbuilding processes.
Karp highlighted the strengthening U.S. defense sector, stating, “America has become more lethal, more confident, more divergent from our adversaries,” and revealed that Palantir has held off on expanding sales to allies due to high domestic demand.
Despite some recent controversy over its work with U.S. Immigration and Customs Enforcement (ICE), Karp defended the company’s data practices, asserting that Palantir’s core products conform to Fourth Amendment protections.
Financial Highlights and Market Sentiment
Net income for the quarter totaled over $608 million, or 24 cents per share, compared to $79 million, or 3 cents per share, the previous year. The company’s U.S. commercial revenue more than doubled year-over-year, with total deal value rising 145% to $4.38 billion.
Palantir’s stock has rallied 81% over the past year, becoming popular among retail investors. However, some Wall Street analysts have expressed concern about the stock’s high valuation, leading to a 15% decline in shares in early 2026.
In November, investor and short seller Michael Burry revealed a position betting against Palantir and Nvidia, prompting CEO Karp to dismiss the move as “market manipulation.” The stock experienced a notable drop amid broader concerns over AI stock valuations and potential market bubbles.
In a shareholder letter, Karp reaffirmed Palantir’s focus on profitability, emphasizing the importance of delivering tangible value from its AI and data solutions. He noted that the company’s commercial segment benefits from the need for structured software to support large language models and advanced AI systems.
Upcoming Earnings Call
Palantir will conduct an earnings call with analysts at 5 p.m. ET to discuss these results and outlook.
