Palantir Exceeds Q4 Estimates Thanks to AI and Defense Demand Boost

• Q4 revenue grew 70% year-over-year to $1.41 billion, with U.S. government revenue up 66% and U.S. commercial revenue more than doubling from the prior year
• Full fiscal year 2026 revenue guidance of $7.182-$7.198 billion significantly exceeds Wall Street's $6.22 billion estimate, reflecting strong AI adoption momentum
• CEO Alex Karp called the results 'indisputably the best results in tech in the last decade' and noted demand is so strong that Palantir has delayed selling new products to international allies to focus on U.S. government clients

Palantir Q4 Earnings Summary

Financial Performance

Palantir Technologies significantly exceeded Q4 expectations, reporting revenue of $1.41 billion versus $1.33 billion estimated. Revenue surged 70% year-over-year from $827.5 million, with full fiscal year sales reaching $4.48 billion. Net income totaled $608 million ($0.24 per share).

U.S. government revenue hit $570 million while commercial revenue reached $507 million, both beating analyst estimates. U.S. commercial revenues more than doubled year-over-year, with remaining deal value jumping 145% to $4.38 billion.

Forward Guidance

Palantir issued robust guidance: Q1 2026 revenue expected at $1.532-$1.536 billion (vs. $1.32 billion consensus) and full-year 2026 revenue of $7.182-$7.198 billion (vs. $6.22 billion expected). CEO Alex Karp called these "indisputably the best results that I'm aware of in tech in the last decade."

Growth Drivers

The company benefited from accelerated AI adoption and strong government demand, particularly from the Department of Defense, which saw 66% growth. Palantir serves major agencies including the DOD, IRS, and Department of Homeland Security. A partnership with leading AI chipmaker was announced during the quarter.

Market Context

The stock has rallied 81% over the past year, making it popular among retail investors. However, some Wall Street analysts express concern about valuation multiples. Notable short seller Michael Burry revealed a bet against the company in November. Recent weeks saw controversy over Palantir's work with ICE, though Karp defended the company's data protection practices.