Shares of Palantir Technologies opened sharply higher on Tuesday, rising 6.9% in early trading after the Denver-based data analytics company reported quarterly results that investors interpreted as validation of its defense-focused artificial intelligence offerings.
At the early-session price of $158, the gain would add about $24.4 billion to Palantir’s market capitalization if it holds. The stock has experienced a dramatic run over the past three years, climbing roughly 1,700% in that period.
Palantir said revenue from the U.S. government jumped 66% in the fourth quarter to $570 million. That increase helped lift total quarterly sales to $1.41 billion, beating analysts’ consensus of $1.33 billion. Management also issued guidance for first-quarter revenue above estimates and signaled a sharp surge in sales in 2026, citing government contracts as a contributing factor.
Analyst and market reactions
Market-watchers pointed to the broader political and industrial backdrop as supportive of Palantir’s business case. Morningstar analysts said: "We believe that the growing political tailwinds for reindustrialization and the strengthening of American supply chains provide a fertile backdrop for greenfield deployments of Palantir’s efficiency-driving software."
Still, valuation concerns linger. The stock currently trades at a forward price-to-earnings ratio of about 131, and Palantir shares are down nearly 17% so far this year despite Tuesday’s jump. Analysts at Jefferies noted that the company will need to sustain its strong performance to justify that valuation, particularly as year-over-year growth comparisons become more difficult.
CEO comments and political scrutiny
Chief Executive Alex Karp defended Palantir’s surveillance technology, saying the company has built safeguards intended to prevent government overreach. In defending Palantir’s role, Karp said it is "supporting in a critical manner, some of the most interesting, intricate, unusual operations that the U.S. government has been involved in," without providing details on specific government programs.
Karp’s remarks come amid heightened scrutiny of firms tied to U.S. Immigration and Customs Enforcement following controversies around the agency’s tactics. The article noted two fatal shootings of U.S. citizens in January as part of the broader context driving increased political, public and investor attention.
Some companies have moved to distance themselves from ICE-related work. The report highlighted French IT firm Capgemini as an example; Capgemini said this week it would sell its U.S. government services unit after facing political, investor and worker backlash over an ICE surveillance contract.
Palantir itself secured an ICE contract last year to develop surveillance software for immigration enforcement. As of June 3, that contract represented the company’s largest single award from the agency among 46 federal contract actions dating back to 2011.
Promotions and investment tools referenced
The article also referenced an AI-based stock selection product, noting that ProPicks AI evaluates Palantir alongside thousands of companies using more than 100 financial metrics. The promotional text cited past winners identified by the service, including Super Micro Computer (+185%) and AppLovin (+157%), and invited readers to check whether Palantir features in current strategies or if alternatives in the sector offer better opportunities.
Outlook
Palantir’s fourth-quarter performance and forward-looking commentary underscore the company’s exposure to rising U.S. government spending on defense and related areas. While the quarter’s figures and guidance have prompted optimism among investors, high valuation multiples and political risks tied to government surveillance contracts remain material considerations for market participants.
Note: All figures, quotes and factual points in this article are drawn from the company results, analyst commentary and related disclosures presented alongside Palantir’s recent quarterly announcement.