Palantir Beats Q4 Estimates as AI and Defense Demand Drive Growth

Palantir Technologies delivered a strong fourth-quarter beat on Monday, fueled by accelerating adoption of its AI platforms across U.S. government agencies and commercial customers, sending shares up roughly 7% in after-hours trading.

The software analytics firm reported adjusted earnings of 25 cents per share, topping expectations of 23 cents, while revenue reached $1.41 billion, ahead of the $1.33 billion consensus estimate. Revenue climbed 70% year over year, underscoring the scale of demand for AI-enabled decision software.

Growth was particularly strong in the U.S. market. Government revenue rose to $570 million, while U.S. commercial revenue reached $507 million, both beating analyst forecasts. CEO Alex Karp said adoption within federal agencies accelerated sharply, with U.S. government revenue growing 66% during the period.

Palantir’s outlook reinforced that momentum. The company guided to first-quarter revenue of $1.532 billion to $1.536 billion, well above expectations, and projected full-year 2026 revenue of $7.18 billion to $7.20 billion, signaling confidence that AI demand will remain durable.

Karp described the quarter as a watershed moment for enterprise AI adoption, arguing that organizations that fail to invest in AI-driven systems risk falling behind.

Much of the current demand is coming from defense and national security customers, including the Department of Defense, following Palantir’s multibillion-dollar contract with the U.S. Army last year. The company also recently announced a partnership with Nvidia, aligning its platforms more closely with advanced AI compute infrastructure.

Profitability improved significantly. Net income rose to $608 million, or 24 cents per share, compared with $79 million a year earlier. Palantir said its U.S. commercial deal value continues to expand rapidly, reflecting growing enterprise adoption beyond government use cases.

Still, the results come amid an ongoing valuation debate. Palantir shares have rallied sharply over the past year, making it one of the most closely watched AI stocks among retail and institutional investors alike.

While some skeptics have warned about lofty multiples, management maintains that demand for AI systems capable of delivering real-world outcomes is only beginning.

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