Palantir (NASDAQ: PLTR) stock soared 6.95% in the extended session between February 2 and 3, rising from its latest closing price of $147.78 to its press time price of $158.05.
The move provided a stark reversal of fortunes for PLTR shares, which have crashed 11.97% between the beginning of the year and the latest closing bell, and it effectively halved the annual losses recorded so far.
What is behind the Palantir stock rally
Palantir’s extended session rally is driven by what can be described as a blockbuster earnings report, accompanied by an even more optimistic guidance.
The surveillance and analytics firm unveiled it had beaten the Wall Street consensus forecast for revenue and for earnings per share (EPS). Specifically, Palantir’s quarterly revenue came in at $1.41 billion – approximately $80 million above the expected $1.33 billion.
EPS was equally impressive as PLTR stock provided $0.25 instead of the $0.23 that was anticipated: nearly a 9% beat.
Elsewhere, the annual results were equally impressive with a 70% year-over-year (YoY) revenue growth for a fiscal year total of $4.48 billion.
Palantir government revenue rockets to $570 million
As per usual, government contracts accounted for a significant portion of the revenue. Indeed, in the quarter covered in the latest report, the public sector paid Palantir an impressive $570 million.
CEO Alex Karp’s remarks that the U.S. government demand has become so significant that his company had to postpone fulfilling some orders for America’s allies, on the other hand, are not as typical and have served as strong tailwinds in the latest rally.
Palantir is a major supplier of artificial intelligence (AI) technology for multiple agencies, including the Department of War (DoW), the Internal Revenue Service (IRS), and the Department of Homeland Security (DHS).
The technology giant’s relationship with the DHS has been drawing significant scrutiny in recent months, especially in the aftermath of the two fatal incidents involving ICE that took place in Minneapolis.
Additionally, numerous observers have voiced their concerns that the use of Palantir software – with the so-called ImmigrationOS serving as a poster child – is becoming downright Orwellian.
Alex Karp, on the other hand, maintains the stance that his company’s technology can only bolster security and privacy and, following the Minneapolis shootings, went as far as to say:
“If you are critical of ICE, you should be out there protesting for more Palantir. Our product, actually, in its core, requires people to conform with Fourth Amendment data protections.”
Palantir revenue expected to grow 60% in 2026
Through the controversy, it is evident that Palantir’s sprawling government contracts and private sector growth are good news for investors.
The second half of the PLTR stock tailwinds came from the fact that the firm anticipates its revenue in the next quarter will rise to approximately $1.53 billion for the entire fiscal year to a staggering $7.19 billion.
Should the annual guidance be reflected in reality, it would mean Palantir not only beat the analyst consensus of $6.22 billion by 15.59%, but also saw a yearly increase in revenue of 60.49%
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