Palantir Stock Soars After Record AI Earnings Report

Palantir Technologies has stormed back into the spotlight, shaking off a period of skepticism and stock market volatility with a fourth-quarter earnings report that stunned Wall Street and reignited debate over the future of artificial intelligence in business and government. On February 2, 2026, the Colorado-based AI software company reported its best-ever quarter, propelling its stock up as much as 12% in a single day and prompting a flurry of bullish analyst upgrades—even as some voices remain wary of the company’s sky-high valuation.

Palantir’s Q4 2025 results, announced after markets closed, revealed a revenue of $1.41 billion—a 70% surge over the same period last year and a figure that beat Wall Street’s consensus estimate by roughly $80 million, according to CNBC and the London Stock Exchange Group (LSEG). Adjusted earnings per share hit $0.25, topping expectations by two cents. The company’s net income soared to $608 million, up from $79 million the year before, marking a dramatic turnaround in profitability.

CEO Alex Karp, never one to shy away from bold pronouncements, told CNBC, “These are indisputably the best results that I’m aware of in tech in the last decade.” For a company that has often polarized investors and commentators alike, the numbers seemed to speak for themselves.

Palantir’s revenue growth was driven by both government and commercial contracts, with particularly strong performance in the United States. U.S. government revenue reached $570 million for the quarter, a 66% increase year-over-year, while U.S. commercial revenue leapt 137% to $507 million. The company’s remaining commercial deal value ballooned by 145% to $4.38 billion, underscoring the growing appetite for AI-driven data analysis tools among American businesses.

But the government side of the business continues to be a powerhouse. Palantir recently inked a deal worth up to $10 billion with the U.S. Army and secured a $448 million contract with the U.S. Navy to modernize shipbuilding. Karp noted that demand from the Department of Defense has been so intense that Palantir has actually delayed selling some new products to international allies in order to prioritize U.S. needs.

The company’s bullishness extended into its guidance for the coming year. Management projected first-quarter 2026 revenue between $1.532 billion and $1.536 billion, well above Wall Street’s $1.32 billion estimate. For the full year, Palantir expects revenue between $7.182 billion and $7.198 billion—far outpacing consensus forecasts of $6.22 billion. These projections, paired with a robust free cash flow outlook, sent a clear message: Palantir’s leadership believes the company is just getting started.

Wall Street, for the most part, was floored. Morgan Stanley called it Palantir’s 10th straight quarter of accelerating revenue growth and raised its revenue forecast for the next two years. The firm reiterated its price target of $205, suggesting about 30% upside from current levels. “PLTR is on course to reach $10B in revenue at the fastest growth rate and highest margins perhaps in software history, underscoring its status as a clear AI winner,” analysts wrote, as cited by CNBC.

Bank of America echoed the enthusiasm, maintaining a “buy” rating and a $255 price target. The bank’s analysts argued that Palantir’s results “cement its place as one which will survive and thrive in the chaos” of the volatile AI market. Truist dubbed Palantir a “Conclusive AI Pure-Play Victor,” highlighting its momentum and the discernible results it is delivering for customers. The firm’s $223 price target implied a 39% upside from current levels.

Wedbush Securities’ Dan Ives was equally effusive, labeling Palantir the “Messi of AI” and one of his top tech picks for 2026. “Palantir is helping lead the AI Revolution into the use case phase as its AIP product moat is unmatched in our view,” Ives wrote, reiterating an “outperform” rating and a $230 price target.

Still, not everyone is convinced that the sky’s the limit. Jefferies analysts sounded a note of caution, pointing to Palantir’s lofty valuation. With shares trading at a forward revenue multiple of 39x for 2027, Jefferies maintained its “underperform” rating and a $70 price target, warning, “We view execution as strong, though at 39x CY27E rev, multiple downside outweighs fundamental upside, with more attractive stocks in our coverage.”

The market’s reaction was swift and dramatic. Palantir’s stock surged over 10% in pre-market trading on February 3, 2026, and closed the day up 6.8% at $157.88—even as the broader Nasdaq index suffered a steep sell-off. Despite a 15% year-to-date decline prior to the earnings report and a 28% drop from its November peak, Palantir shares remain up nearly 100% over the past year, reflecting both the volatility and the enduring excitement surrounding the company’s AI ambitions.

Palantir’s meteoric rise hasn’t been without controversy. The company faced backlash over its work with U.S. Immigration and Customs Enforcement, especially after a high-profile shooting incident in Minneapolis. Karp has defended the partnership, insisting that Palantir’s software enforces Fourth Amendment data protections. Meanwhile, prominent investor Michael Burry revealed a short position in Palantir last November, which Karp dismissed as “bats— crazy” and accused of “market manipulation.” That period saw Palantir suffer its worst month in two years, as the broader AI sector grappled with valuation concerns and institutional selling pressure.

Yet, the company’s fundamentals remain strong. Palantir’s Rule of 40 score—a metric combining revenue growth and profitability—hit an impressive 127%, a rare feat in the tech world. In his letter to shareholders, Karp emphasized that Palantir’s profits are “pure and uncontrived,” pushing back against critics who question the sustainability of the company’s business model. He warned that companies without a “zealous focus on the value being created” by AI will “ultimately fade to grey and be forgotten.”

Palantir’s partnership with Nvidia, announced alongside the earnings, further cements its role in the AI infrastructure ecosystem. As businesses and governments race to harness the power of artificial intelligence, Palantir appears well-positioned to capitalize—if it can continue to deliver on its ambitious promises and convince skeptics that its valuation is justified.

For now, the company’s record-breaking quarter has given investors plenty to cheer about—and plenty to debate. With government contracts accelerating, commercial customers flocking to its platforms, and Wall Street’s brightest minds divided over its future, Palantir stands at the center of the AI revolution, its next moves watched by both fans and critics alike.