Palantir surges 10% after beating earnings estimates
palantir It rose 10% in premarket trading Tuesday after beating Wall Street’s fourth-quarter estimates due to increased spending by governments and businesses on artificial intelligence tools.
Shares rose after LSEG reported revenue of $1.41 billion, above estimates of $1.33 billion. The gains come after a quiet end to 2025 – November was Palantir’s worst month in two years amid a broader decline in software stocks due to fears of an AI valuation bubble. The stock ultimately rose 135% in 2025 but was down 17% year-to-date as of Monday’s close.
CEO Alex Karp told CNBC’s Morgan Brennan that the earnings were “the best results I know of in the tech space in the last decade.”
Palantir shares last year
The company produces software and data tools for businesses and government agencies such as the Department of Defense and the Internal Revenue Service. and the Department of Homeland Security. Karp noted that the adoption of his tools by the US government has resulted in a 66% annual revenue increase.
Palantir signed a software contract worth $10 billion with the US Army in July, and a $448 million agreement with the US Navy in December to accelerate shipbuilding production.
“While Palantir’s valuation is still frothy, it looks more reasonable compared to recent venture rounds for companies tied to the AI ecosystem,” William Blair analyst Louie DiPalma said in a note ahead of earnings Monday.
DiPalma said he expects Palantir’s operating margin to increase from 50% to 65% over the next five years as the firm increases its government and defense contracts.
The company’s work with U.S. Immigration and Customs Enforcement (ICE) has come under scrutiny in recent weeks after federal agents shot two protesters in Minneapolis.
