Palantir Defies Skeptics with Record Quarter, Fueled by U.S. Government Surge

In a technology sector rattled by doubts, Palantir Technologies just posted a quarter that CEO Alex Karp called the best in tech for ten years. The data analytics firm reported $1.41 billion in fourth-quarter revenue, soundly beating Wall Street forecasts of $1.33 billion. For the full 2025 fiscal year, sales hit $4.48 billion. The report, delivered in early 2026, sent shares up 5% after hours, offering a reprieve from a recent slide.

The standout driver was the U.S. government. Revenue from federal agencies soared 66% to $570 million, reflecting a deep and accelerating push to modernize military and intelligence infrastructure. This follows a landmark $10 billion Army contract secured last summer and a $448 million Navy deal in December. Karp, speaking to CNBC, framed the work in stark terms, saying it has made America "more lethal, more confident" and distinct from both adversaries and allies.

Perhaps more surprising was the strength in Palantir's commercial business, where U.S. revenue more than doubled to $507 million. This challenges the old critique that the company is merely a government contractor. Karp argued that commercial clients are turning to Palantir to bring structure and practical use to sprawling AI systems.

The company's profitability also silenced a common criticism. Net income expanded nearly eightfold to $608 million. This comes as investors, weary of speculative AI bets, increasingly demand proof of earnings.

Looking ahead, Palantir's guidance was strikingly confident. It projects first-quarter revenue around $1.53 billion and full-year 2026 sales up to $7.19 billion—figures far above analyst expectations. This bullish outlook sets a high bar for the year, directly confronting market anxiety about inflated AI valuations. Karp even revealed that domestic demand is so strong the company has deliberately slowed sales to allied nations to focus on U.S. clients.

Despite the operational triumph, Palantir remains a polarizing stock, caught between its fundamental performance and a sector-wide reassessment of what AI companies are truly worth. For now, the numbers are speaking loudly.