Prime Highlights:
- Palantir’s shares rose 10% in early trading after reporting higher-than-expected fourth-quarter revenue of $1.41 billion.
- The company secured major government contracts, including a $10 billion deal with the U.S. Army and a $448 million deal with the U.S. Navy.
Key Facts:
- Palantir saw 66% year-on-year growth in revenue from U.S. government contracts.
- Despite a year-to-date drop of 17%, the company’s stock gained 135% in 2025, showing strong long-term performance.
Background:
Palantir’s stock climbed 10% in early trading on Tuesday after reporting higher-than-expected quarterly earnings. The firm posted $1.41 billion in revenue, beating the $1.33 billion predicted by analysts. This comes after a tough end to 2025, when November was Palantir’s weakest month in two years amid a general slowdown in software stocks.
Even with a drop at the start of the year, Palantir’s stock gained 135% in 2025 but is currently down 17% so far this year.
CEO Alex Karp said the results are among the strongest he has seen in the tech industry in the past ten years. Palantir makes software and data tools for businesses and government agencies, such as the Department of Defense, IRS, and Homeland Security.
Analysts remain optimistic about Palantir’s long-term prospects. Louie DiPalma, from William Blair, noted that while the company’s valuation remains relatively high, it is more reasonable when compared to recent venture funding for AI-related firms.
DiPalma also projected that Palantir’s operating margin could increase from 50% to 65% over the next five years, fueled by expanding government and defense contracts.
Palantir has faced criticism because of its work with the U.S. Immigration and Customs Enforcement (ICE), especially after recent incidents in Minneapolis that sparked protests.