Palantir Technologies PLTR delivered a strong fourth-quarter performance, topping Wall Street estimates as demand for its artificial intelligence (AI) software rose across both government and commercial customers, as quoted on CNBC. The upbeat results sent shares up about 12% in after-hours trading on Feb. 2, 2026.
Q4 Results Crush Expectations
The AI-driven data analytics firm exceeded consensus forecasts on both the top and bottom lines. Quarterly earnings of $0.25 per share beat the Zacks Consensus Estimate of $0.23 per share, compared with earnings of $0.14 per share a year ago. Revenues of $1.41 billion surpassed the Zacks Consensus Estimate of $1.35 billion, as well as year-ago revenues of $827.5 million.
U.S. Demand Drives Growth
Palantir’s results were helped by its U.S. operations. Government revenue rose to $570 million, while U.S. commercial revenue reached $507 million, both comfortably beating FactSet estimates, as quoted in the above-mentioned CNBC article.
Deepening ties with the U.S. government, a segment that grew 66% year over year, have been a key catalyst. Demand has been especially strong from the Department of Defense, CNBC noted.
On the commercial side, U.S. revenues more than doubled from a year ago, while remaining U.S. commercial deal value surged 145% year over year to $4.38 billion. During the quarter, Palantir also announced a partnership with AI chip leader NVIDIA.
Upbeat Outlook
Palantir issued guidance that blew past analyst expectations. The company forecasts $1.532–$1.536 billion in first-quarter revenue, well above the Zacks Consensus Estimate of $1.31 billion. For fiscal 2026, Palantir guided to $7.182–$7.198 billion in revenue, versus the Zacks Consensus Estimate of $6.23 billion, indicating strong AI-driven demand.
Valuation Concerns Linger
Even with the earnings beat, rich valuation remains a cause for concern. Palantir stock has traded with a price-to-earnings (P/E) ratio of 229.05X on a trailing twelve-month basis versus a 25.98X P/E for the Internet – Software industry.
What Lies Ahead for ETFs?
As investors rotate away from richly valued AI stocks amid apprehension over higher rates in the United States, Palantir’s ability to translate AI euphoria into sturdy profits indicates the solid fundamentals still awaiting in the AI space. William Blair recently upgraded Palantir and expects shares to rebound to $200, as quoted on CNBC.
Investors wary about Palantir’s rich valuation can play Palantir-based exchange-traded funds (ETFs) like Roundhill PLTR WeeklyPay ETF PLTW (up 14.6% after hours on Feb. 2), iShares U.S. Tech Independence Focused ETF IETC (up 0.3% after hours on Feb. 2), iShares Expanded Tech-Software Sector ETF IGV (up 1.5% after hours on Feb. 2), and Global X Defense Tech ETF SHLD (up 1.3% after hours on Feb. 2). Note that the basket approach minimizes the company-specific concentration risks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Global X Defense Tech ETF (SHLD): ETF Research Reports iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports iShares U.S. Tech Independence Focused ETF (IETC): ETF Research Reports Palantir Technologies Inc. (PLTR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
