Palantir’s stock surges as AI demand drives another record quarter Palantir Technologies reported a record-breaking quarter on Monday, beating revenue and earnings expectations and sending the stock up 9% in after-hours trading.
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announced $1.41 billion of revenue for the fourth quarter of 2025, a 70% rise relative to a year before. The result topped the FactSet consensus of $1.34 billion and marked the company’s highest quarterly revenue to date.The growth was driven by a massive breakout in the U.S. commercial sector, which grew 137% year over year to $507 million. U.S. government revenue grew 66% year over year to $570 million.Palantir’s Rule of 40 score is now an incredible 127%,” CEO Alex Karp said in the company’s press release, meaning that the sum of the company’s annual revenue growth rate and adjusted operating margin hit 127%.
Karp attributed the success to the company’s early bet on artificial intelligence, allowing Palantir to deliver scalable results from AI technology while competitors scramble to catch up.
The company also posted a new record of $609 million in net income for the fourth quarter, a 28% increase from the previous quarter. Adjusted earnings for the quarter came out to 25 cents per share. Wall Street analysts had been anticipating 23 cents per share.
For fiscal year 2026, Palantir forecasts revenue between $7.18 billion and $7.20 billion — a 61% growth rate that the company noted would “crush consensus expectations.” This guidance comes in well above the $6.3 billion figure projected by analysts.
For the current quarter, Palantir expects revenue between $1.53 billion and $1.54 billion, also beating consensus expectations of $1.45 billion.The market’s positive reaction marks a sharp reversal of a recent trend. Shares of Palantir have fallen nearly 30% in the past three months, battered by valuation concerns and broader fears that AI could disrupt traditional software models.Karp pointed to Palantir’s December-quarter outperformance as proof that AI can actually add value to businesses instead of contributing to stock-market hype. “Other pockets of what some not-incorrectly describe as a frothy market for artificial intelligence may feel pressure to manage their businesses around their financials,” Karp wrote in a letter to shareholders. “Our record profit, however, is pure and uncontrived.”
In a note earlier on Monday, Mizuho desk-based analyst Jordan Klein wrote that Palantir’s stock action post-earnings would be a bellwether for software sentiment at large this earnings season. Palantir “would probably be that single stock that many would want to own” amid the current negative sentiment in software, according to Klein.
