The Stock of Palantir Surges as AI Traction Leads to Huge Earnings Beats Across the Board

Palantir Technologies Inc. delivered a standout forecast on Monday, surpassing Wall Street expectations and fueling an already impressive stock rally.

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The data analytics company projected full-year revenue between $3.741 billion and $3.757 billion, well above the $3.503 billion consensus estimate from analysts surveyed by FactSet. For the current quarter, Palantir anticipates revenue between $858 million and $862 million, significantly higher than the $799 million analysts had expected.

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This optimistic outlook underscores the strong momentum in Palantir’s U.S. business, which expanded by 52% year over year in the most recent quarter. Sequentially, revenue from the U.S. market climbed 12% to $558 million.

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Following the announcement, Palantir shares surged 23% in after-hours trading Monday. The stock has already skyrocketed nearly 400% over the past year.

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Chief Executive Alex Karp emphasized the company’s rapid growth in a letter to shareholders, stating that “the momentum we are seeing across sectors, both commercial and government, is unlike anything that has come before.”

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Palantir has long positioned its software as a more valuable asset than large language models (LLMs), arguing that businesses need robust tools to effectively integrate and utilize these AI models. That belief was reinforced by the latest earnings results, which showcased strong adoption of Palantir’s technology across industries.

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Chief Revenue Officer Ryan Taylor explained to MarketWatch that the company is focused on seamlessly deploying AI models in enterprise settings to drive meaningful impact, rather than just developing LLMs themselves.

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Karp also addressed this distinction in an interview, noting that one of Palantir’s recent achievements has been “getting to humiliate all the people who said large language models are the end state, not the resource that needs to be processed.” While many companies concentrated on building LLMs, Palantir focused on managing and applying them effectively within enterprises.

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The evolving AI landscape, especially in light of DeepSeek’s emergence, has led more Wall Street analysts to acknowledge that LLMs might be more of a commodity than initially thought.

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Palantir’s fourth-quarter revenue reached $828 million, marking a 36% increase from the prior year and exceeding analyst expectations of $776 million. The company highlighted that growth in its U.S. segment continues to significantly outpace its performance in several European markets.

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“We have the products and reach of an established incumbent and the speed, growth, and agility of an insurgent startup,” Karp wrote in the shareholder letter.

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Palantir also posted stronger-than-expected earnings, reporting adjusted earnings per share of 14 cents, above the 11-cent consensus forecast.

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Chief Financial Officer David Glazer attributed this profitability to a combination of operational efficiency and revenue growth, noting that Palantir has remained disciplined with its operating expenses while leveraging AI to enhance internal processes.

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