Palantir Up 10% in pre-market trading Tuesday Wall Street Q4 Forecast As government and business spending on AI tools continues to increase.

The company reported revenue of $1.41 billion, higher than LSEG’s forecast of $1.33 billion, and its shares soared. The earnings report comes after a modest end to 2025 – November Palantir’s Worst Month Within two years, within a broader Software stocks fall Out of concerns about artificial intelligence valuation bubbles. The stock ended up rising 135% in 2025, but was down 17% year to date as of Monday’s close.

CEO Alex Karp told CNBC’s Morgan Brennan that the results were “the best I’ve seen in tech in the last decade”.

The company creates software and data tools for businesses and government agencies (such as the Department of Defense, Internal Revenue Service). and the Department of Homeland Security. Karp noted that after the U.S. government adopted its tools, revenue increased 66% year over year.

Palantir signed software contract Agreements worth up to $10 billion were reached with the U.S. Army in July and a $448 million deal with the U.S. Navy in December to speed up shipbuilding production.

“While Palantir’s valuation remains frothy, it appears to be more reasonably valued relative to recent rounds of companies related to the AI ​​ecosystem,” William Blair analyst Louie DiPalma said in a note ahead of Monday’s earnings release.

DiPalma said the company expects Palantir’s operating margins to increase from 50% to 65% over the next five years as government and defense contracts increase.

The company works with U.S. Immigration and Customs Enforcement (ICE) under scrutiny In recent weeks, federal agents shot and killed two protesters in Minneapolis.