Palantir Defies Tech Slump with Stellar Q4, Fueled by Surging U.S. Government and Commercial Contracts
Palantir Technologies Inc. (PLTR) delivered a powerful counter-narrative to the recent software sell-off on Monday, posting fourth-quarter results that handily exceeded analyst expectations. The performance was anchored by remarkable growth in its domestic business, spanning both government and commercial sectors.
The company reported revenue of $1.4 billion, a 70% jump from the year-ago period and surpassing the Bloomberg consensus estimate of $1.3 billion. Adjusted earnings per share came in at $0.25, above the projected $0.23. More notably, Palantir's guidance pointed to sustained momentum, with a first-quarter revenue forecast of $1.5 billion and a full-year 2025 outlook of approximately $7.2 billion, both well ahead of street views.
The engine of this outperformance was unequivocally the U.S. market. U.S. commercial revenue skyrocketed 137% year-over-year to $507 million, while revenue from U.S. government agencies climbed 66% to $570 million. This dual strength underscores Palantir's entrenched position in national defense and intelligence workflows, even as it rapidly expands its foothold in enterprise AI and data analytics.
The strong report provided a measure of relief for investors after a challenging month for software stocks, including Palantir, which had shed about 12% of its value amid concerns over lofty valuations and potential disruption from generative AI. In an interview with Yahoo Finance ahead of the release, CEO Alex Karp addressed the existential question facing legacy software providers. "In tech, you only have a time horizon of a couple years. You can't say we will never be disrupted," Karp stated. He argued, however, that Palantir's long-term investments in its core AI platforms have uniquely positioned it for the current era.
The company's political ties, however, remain a point of contention. Analyst Louis DiPalma of William Blair upgraded the stock to Outperform on Monday, citing a "more reasonable" valuation and the firm's strategic government work. This includes its controversial contracts with agencies like Immigration and Customs Enforcement (ICE), which have drawn sustained criticism from civil rights advocates.
Market Voices:
"This isn't just a beat; it's a statement," says Michael Thorne, a portfolio manager at Horizon Capital. "The commercial growth rate is staggering. It proves their Foundry platform is gaining serious traction beyond the spy world. The guidance suggests they see this as sustainable, not a one-off."
"Let's not whitewash what's driving a lot of this profit," retorts Anya Sharma, a tech ethics fellow at The Carter Institute. "Celebrating these numbers without acknowledging the human cost of their ICE contracts is grotesque. They're monetizing surveillance and deportation infrastructure. The stock might be up, but their moral capital is bankrupt."
"The upgrade makes sense from a pure numbers perspective," notes David Chen, an independent market analyst. "The sell-off was overdone. While AI is a risk to many, Palantir's bespoke, integrated solutions are harder to displace than off-the-shelf software. Their moat in government is incredibly deep."
— Laura Bratton, Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social.
Click here for the latest technology news impacting the stock market.
Read the latest financial and business news from Yahoo Finance.