Palantir Technologies CEO Alex Karp attends the 56th annual World Economic Forum (WEF) meeting in Davos, Switzerland, January 20, 2026.
Denis Balibouse | Reuters
Palantir surged 11% in premarket trading on Tuesday after beating Wall Street’s fourth-quarter estimates amid rising spending on artificial intelligence tools from governments and businesses.
The shares popped after it reported $1.41 billion in revenue, ahead of LSEG estimates of $1.33 billion. The company posted adjusted earnings per share of 25 cents, beating the 23 cents a share expected by LSEG.
The earnings came after a muted end to 2025 — November was Palantir’s worst month in two years amid a broader decline in software stocks over fears of an AI valuation bubble. The stock ultimately rose 135% in 2025 but, at Monday’s close, was down 17% year to date.
CEO Alex Karp told CNBC’s Morgan Brennan Monday that the earnings were “the best results that I’m aware of in tech in the last decade.”
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Palantir stock over the past year
Palantir creates software and data tools for businesses and government agencies like the Department of Defense, the Internal Revenue Service and the Department of Homeland Security. Karp noted that the adoption of its tools by the U.S. government saw 66% year-over-year revenue growth.
Palantir signed a software contract worth up to $10 billion with the U.S. Army in July, and a $448 million deal with the U.S. Navy in December to accelerate shipbuilding production.
“Although Palantir’s valuation is still frothy, it appears more reasonable relative to recent venture rounds for companies tied to the AI ecosystem,” said Louie DiPalma, analyst at William Blair, in a note on Monday ahead of the earnings.
DiPalma said the firm expected Palantir’s operating margin to rise from 50% to 65% over the next five years as it increased government and defense contracts.
The company has seen its work with the U.S. Immigration and Customs Enforcement come under scrutiny in recent weeks, after federal agents shot two protesters in Minneapolis.