NEW YORK, Feb 3, 2026, 16:16 (EST) — After-hours
- Palantir shares held onto gains after the bell, buoyed by a quarterly beat and an improved 2026 outlook.
- Investors are juggling fast growth with a valuation that some see as stretched, along with political risks tied to federal contracts.
- Focus shifts to deal flow, fresh customer wins, and any immediate disruption in U.S. government operations.
Shares of Palantir Technologies Inc. climbed roughly 6.9% to $157.90 following Tuesday’s close, after fluctuating between $153.18 and $165.65 throughout the session.
The change arrives during a tough period for AI-linked software stocks, where investors quickly punish lofty valuations and any hint of growth faltering. Palantir has been caught in the middle of this storm for months, despite ramping up its focus on government and industrial sectors.
Palantir, backed by Peter Thiel and an early favorite of the Central Intelligence Agency, has soared over the past three years but is still down about 17% so far in 2026. Its shares trade at roughly 131 times projected earnings, keeping valuation worries in the spotlight despite Tuesday’s rebound. CEO Alex C. Karp claimed the company is “supporting in a critical manner” some of the U.S. government’s most complex operations, even as criticism grows over its contracts with U.S. Immigration and Customs Enforcement — a sector that has prompted firms like Capgemini to step away from ICE-related deals. Reuters
According to an SEC filing, the company’s fourth-quarter revenue surged 70% to $1.407 billion. U.S. government revenue climbed 66% to $570 million, while U.S. commercial revenue soared 137% to $507 million. For the first quarter, it projects revenue between $1.532 billion and $1.536 billion, and full-year revenue in the range of $7.182 billion to $7.198 billion. Total contract value—representing signed deals—hit a record $4.262 billion. “We are an n of 1, and these numbers prove it,” Karp said. SEC
Jefferies analyst Brent Thill isn’t convinced the stock is worth chasing. He told clients to expect “tougher comps ahead,” Wall Street lingo for steeper year-ago hurdles, and pointed to a slowdown in customer growth since earlier this year. Fortune
Traders are keen to see whether Palantir can turn its deal flow into consistent commercial revenue instead of relying heavily on a few large federal contracts. Management highlighted strong operating leverage, though margins often face swift pressure when growth slows down.
The bar remains steep. Given Palantir’s valuation, even a slight stumble in customer growth, a delay in government spending, or a negative headline could spook enterprise buyers.
Tuesday’s tape offered an early clue: the stock jumped at the open but then lost some ground, a typical reaction as investors digest the implications of the guidance.
Investors are keeping an eye on Washington. The partial shutdown started Saturday, and the U.S. House of Representatives is set to vote Tuesday on stopgap funding. Speaker Mike Johnson expressed optimism that the shutdown will wrap up in days — a crucial development for a company heavily tied to U.S. federal agencies. Reuters
