Palantir Pops 12% As Q4 Numbers Confirm Uncle Sam’s AI Spend Is Still on Auto-Renew

It’s Alex Karp’s world and we’re all just living in it…

The final boss of government contracting exploded 12% after dropping Q4 earnings that probably made even Michael Burry hover his cursor over the “pause” button on that Palantir is a fraud Substack draft. Turns out when everyone’s worried AI is about to eat software companies alive, Palantir would like to remind you that it is the software eating everything else.

This time around, their CEO didn’t have to threaten short sellers or write a book… the numbers did all the talking. Palantir posted about $1.41 billion in quarterly revenue, cruising past expectations that were sitting closer to $1.3 billion. Adjusted earnings came in at $0.25 a share, just enough above estimates to send shorts sprinting for the exits. 

And then came guidance… the real jump scare. First-quarter revenue around $1.5 billion. Full-year revenue roughly $7.2 billion. Wall Street was braced for something meaningfully lower on both fronts. Instead, Palantir handed analysts a forecast and said, “You might want to sit down.”

This all comes after what was, frankly, a weird stretch for the stock. November was Palantir’s worst month in two years as software names got dragged through the mud on fears that AI would vaporize margins and make half the sector obsolete (we can thank Oracle for that).

(Source: Marketwatch)

Despite finishing last year up roughly 135%, the stock still limped into earnings down double digits year to date. In other words: sentiment was fragile. Perfect conditions for a face-ripping rally.

The engine behind the beat is gonna shock you… it was Uncle Sam backing the truck up again. U.S. commercial revenue catapulted 137% year over year, while U.S. government revenue jumped 66%. 

When your biggest customers are the Department of Defense, Homeland Security, and the IRS (and they’re all deciding they need AI now) revenue suddenly gets very real, very fast. Add in a $10 billion Army software contract and a nearly half-billion-dollar Navy deal aimed at speeding up shipbuilding, and we’ve got a long-term cash conveyor belt on our hands.

CEO Alex Karp, never known for underplaying a moment (or forgetting to use hairspray), didn’t waste his moment in the spotlight, calling the results “the best I’m aware of in tech in the last decade.” He also acknowledged the thing everyone’s been screaming about: yes, AI absolutely threatens traditional software companies. 

His take however is that the apocalypse already happened at Palantir… years ago. They rebuilt early, bet heavy, and now get to watch everyone else scramble. You may not like the guy, but you have to admit the guy is good at instilling confidence in his cult following.

Even the valuation police loosened the handcuffs. Yes, Palantir still isn’t cheap… but compared to private AI startups raising $3 billion on a pitch deck, a logo, and a founder who says “platform” a lot, it suddenly looks… rational? If Palantir keeps stacking government contracts and expanding margins the way some expect (potentially pushing operating margins north of 60% over the next few years) today’s multiple is a lot easier to get behind.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.