To The Moon

$Palantir Technologies Inc.(PLTR)$  

Earnings and Guidance Highlights

Palantir reported Q4 2025 results that significantly beat expectations with revenue of about $1.41 billion (up ~70 per cent year-on-year) and adjusted EPS topping forecasts. The company’s strong performance was driven by both U.S. government and commercial segments. 

Management issued upbeat guidance for 2026, forecasting full-year revenue of approximately $7.18–7.20 billion (around ~61 per cent growth) and guiding first-quarter revenue ahead of consensus. 

After the results the stock rallied meaningfully in after-hours and pre-market trading, reversing some earlier weakness this year. 

Drivers of Growth

Demand remains very strong from U.S. government and defence customers, including large multi-year deals such as a reported $10 billion Army contract and ongoing work with other agencies. 

U.S. commercial revenue has also grown rapidly, with cited double-digit increases driven by adoption of Palantir’s AI-enabled platforms. 

Total contract value and large enterprise deals have expanded sharply, indicating strong pipeline momentum. 

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Can Government-Led AI Demand Sustain Growth into 2026?

Supportive Factors

1 Defence and Federal AI Budgets Are Expanding

Government agencies are increasingly investing in AI tools for operational use, strategic decision support, and data fusion at scale. Palantir’s integration into mission-critical workflows, particularly in defence and national security, positions it favourably if those trends persist. 

2 Long-Term Contracts Provide Revenue Visibility

Large multi-year contracts, especially with defence and intelligence customers, contribute predictable revenue streams that can smooth growth even in slower enterprise markets. 

3 Commercial Uptake Adds Diversification

Rapid growth in U.S. commercial sales suggests that Palantir’s AI platforms are gaining traction beyond the public sector, helping reduce dependency on government spending cycles. 

Risks and Headwinds

1 Valuation Is Elevated

At current multiples, the valuation embeds high expectations for sustained growth. Any slowdown in AI spending or weaker bookings could pressure the share price. 

2 International Expansion Is More Challenging

Growth outside the U.S. has not matched domestic momentum, with European adoption lagging, which could limit global scaling. 

3 AI Investment Cycles are Cyclical

Government budgets and enterprise AI programmes may be subject to political shifts and spending reprioritisation. Sustained growth depends on continued funding and project deployments.

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Durable Re-rating or Relief Rally?

Argument for a Durable Re-rating

The beat and uplift in guidance demonstrates that Palantir’s business can deliver robust growth underpinned by both government and commercial demand.

Continued AI adoption, particularly where data integration and analytics are mission-critical, suggests that the company’s platforms have a defensible position relative to commoditised AI offerings. 

Strong profitability metrics and cash generation support a long-term growth narrative rather than a short-term rebound.

Argument for a Relief Rally

The rally could partly reflect short-term sentiment relief after recent share weakness and investor scepticism about high valuations.

A significant portion of expected AI growth may already be priced into the stock. If commercial momentum slows or defence spending moderates, multiple compression could follow. 

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Balanced Assessment

Palantir’s earnings beat and strong guidance align with sustained underlying demand, particularly from defence and government agencies and increasingly in enterprise AI use cases. These factors underpin the potential for durable growth beyond 2026, provided that spending in AI and analytics remains robust.

At the same time, the valuation premium and reliance on cyclical government budgets introduce risk that the current stock rebound could partially be a relief rally rather than a structural re-rating. Ongoing execution on commercial expansion and international diversification will be critical in determining whether this momentum persists.