Palantir just delivered what CEO Alex Karp is calling "indisputably the best results" in tech this decade. The AI-powered software firm crushed fourth-quarter expectations with $1.41 billion in revenue - a 70% jump from last year - as both government agencies and corporations race to deploy its AI tools. Shares surged 7% after-hours as the company issued guidance that blew past Wall Street's projections, signaling the AI spending wave shows no signs of slowing.
Palantir just rewrote the playbook for AI earnings. The Denver-based software firm reported fourth-quarter revenue of $1.41 billion, demolishing Wall Street's $1.33 billion estimate and marking a staggering 70% surge from the $827.5 million it pulled in a year ago. Earnings per share hit 25 cents, beating the 23-cent consensus. Shares jumped 7% in after-hours trading as CEO Alex Karp declared the results "indisputably the best" he's seen in tech over the past decade during an interview with CNBC's Morgan Brennan.
The numbers tell a story of AI adoption accelerating faster than almost anyone predicted. U.S. government revenue climbed to $570 million while commercial revenue hit $507 million, both crushing FactSet estimates. For the full fiscal year, Palantir racked up $4.48 billion in sales. But it's the forward guidance that has investors buzzing - the company projects first-quarter revenue between $1.532 billion and $1.536 billion, obliterating the $1.32 billion analysts expected.
For fiscal 2026, Palantir guided to $7.182 billion to $7.198 billion in revenue, a figure that towers over the $6.22 billion Wall Street had penciled in. "If you're not spending it on this, you're not spending on something that is part of keeping up with momentum," Karp told CNBC, making clear that AI investment has become a competitive imperative rather than a discretionary expense.
The government sector remains Palantir's fortress. U.S. government revenue grew 66% year-over-year, fueled largely by Department of Defense contracts. Last summer, the company landed an up to $10 billion deal with the U.S. Army for software and data infrastructure. "America has become more lethal, more confident, more divergent from our adversaries, and, quite frankly, from our allies," Karp said, describing the government's urgent push to deploy Palantir's AI-powered decision-making tools.
That urgency has created an unusual problem - demand is outstripping Palantir's bandwidth. Karp revealed the company has become "so engaged in the U.S." that it's deliberately holding off on selling new products to international allies. It's a striking admission that underscores just how dramatically the AI landscape has shifted in the past year.
But not all the attention has been positive. Palantir's work with U.S. Immigration and Customs Enforcement has drawn fierce criticism, especially after federal agents fatally shot two protesters in Minneapolis. Karp pushed back hard during the CNBC interview. "If you are critical of ICE, you should be out there protesting for more Palantir," he argued, claiming the company's software actually enforces Fourth Amendment data protections.
On the commercial side, Palantir is seeing explosive growth that rivals its government business. U.S. commercial revenues more than doubled from last year, while remaining U.S. commercial deal value surged 145% to $4.38 billion. The company announced a strategic partnership with Nvidia during the quarter, integrating its AI software platform with the chipmaker's infrastructure to help enterprises deploy AI systems faster.
Profitability has swung dramatically. Net income hit $608 million, or 24 cents per share, compared to just $79 million - 3 cents per share - a year ago. In a letter to shareholders, Karp called the profit "pure and uncontrived," a pointed response to critics who've questioned whether AI companies can translate hype into sustainable margins. He argued that Palantir's commercial success stems from providing the structure large language models desperately need to deliver actual business value. "Anything lacking a zealous focus on the value being created by these technical systems, the mice that the cat actually catches, will ultimately fade to grey and be forgotten," Karp wrote.
The results come as Palantir navigates a turbulent moment for AI stocks. Shares are down about 15% in 2026 after wrapping their worst month in two years last November amid broader valuation concerns and bubble fears. "Big Short" investor Michael Burry revealed a bet against both Palantir and Nvidia in November, prompting Karp to call the move "bats--- crazy" and accuse short sellers of market manipulation.
Despite the volatility, retail investors remain devoted - the stock has rallied 81% over the past year, even as some Wall Street analysts warn about stretched valuations. Palantir's forward price-to-earnings multiple has drawn particular scrutiny, with bears arguing the stock has gotten ahead of fundamentals. Tonight's blowout results and aggressive guidance might quiet some of that skepticism, at least temporarily.
Palantir's trajectory reflects a broader shift in enterprise software. Companies aren't just experimenting with AI anymore - they're racing to deploy it at scale before competitors gain an edge. The same urgency is reshaping government procurement, where defense and intelligence agencies are pouring billions into AI-powered analytics and decision-making tools. Palantir has positioned itself at the center of both trends, building software that promises to turn data chaos into actionable intelligence.
The company is scheduled to hold its earnings call with analysts at 5 p.m. ET, where Karp and CFO Dave Glazer will face questions about sustainability, valuation, and whether this growth pace can continue. For now, at least, Palantir has delivered proof that AI demand isn't just real - it's accelerating.
Palantir's blowout quarter settles a critical question that's haunted AI stocks for months - can companies actually monetize this technology at scale? The answer, at least for now, is a resounding yes. With revenue growing 70% and guidance that suggests 2026 could be even stronger, Palantir has demonstrated that both government agencies and enterprises are willing to write massive checks for AI tools that deliver measurable results. The controversy around its government work isn't slowing momentum, and the company's partnership with Nvidia positions it at the intersection of AI's two most critical elements - chips and software. Whether the stock's valuation can keep pace with these results remains Wall Street's biggest debate, but operationally, Palantir just delivered the kind of quarter that separates AI winners from pretenders.
