Palantir Technologies Stock Soars After US Revenue Jumps 93% in Q4; Valuation 'More Reasonable'

Palantir Technologies (Nasdaq: PLTR) shares jumped 11.7% during premarket hours on Tuesday, a day after the company posted robust Q4 financial results. The company's revenue from US operations jumped 93% year-over-year in Q4 to $1.07 billion (£783.7 million), beating consensus estimates. This feat was supported by US commercial revenue growth of a whopping 137% from a year earlier and revenue growth of 66% YoY from government contracts.

Adjusted earnings per share in Q4 stood at $0.25 (£0.18). For Q1 2026, the company expects revenue between $1.532 billion and $1.536 billion (£1.122 billion to £1.125 billion). 'Palantir is alone in choosing to exclusively focus on scaling the operational leverage made possible by the rapid advancements of AI models, a trend that we first called "commodity cognition" well before others started repeating it,' said Palantir CEO Alex Karp.

Palantir Stock Now More Reasonably Valued

The stock had faced selling pressure from a recent sell-off in software equities and concerns over the company's high valuation. Karp had acknowledged in a recent interview that AI could pose a challenge to software providers.

'In tech, you only have a time horizon of a couple of years. You can't say we will never be disrupted. But we made investments in this tech years ago, all of which we thought would be valuable,' he said, adding that 'the products and the culture we have are ideally built for the time we are in now.'

However, the upbeat Q4 financial results led analysts to upgrade the stock. William Blair analyst Louis DiPalma upgraded Palantir yesterday to 'outperform' from 'market perform', saying its recent drawdown has made the company's valuation 'more reasonable'. He highlighted the company's collaboration with the Trump administration, although that relationship has garnered public criticism.

Analysts also expect Palantir's operating margin to increase to 65% from 50% over the next five years, driven by an increase in government and defence contracts.

Backlash Over ICE Collaboration

Palantir has faced severe backlash over its collaboration with the US Immigration and Customs Enforcement following multiple fatal shooting incidents across the country. However, Karp defended the partnership and said that the company's software enforces Fourth Amendment data protections.

At the same time, renowned investor Michael Burry, who predicted the 2008 market crash, disclosed in late 2025 that he had a short position against Palantir, which Karp described as 'bats — crazy' and 'market manipulation'. Despite these developments and a recent stock price correction, Palantir's fundamentals continue to tell a compelling story.

In a letter to shareholders, Karp stressed that the company's profits are 'pure and uncontrived', pushing back against critics questioning the company's fundamentals. He even cautioned that companies without a 'zealous focus on the value being created' by AI will 'ultimately fade to grey and be forgotten'.

Palantir retains its position as the market's most trending AI pure plays amid ongoing growth in government contracts and commercial clients.

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