New York, Feb 3, 2026, 05:58 EST — Premarket
- Before the bell, Palantir shares climbed following fourth-quarter results and a 2026 outlook that exceeded expectations.
- Traders juggle the promise of AI-driven growth with concerns over high valuations and the fallout from a shutdown-hit Washington.
Palantir shares gained 0.8% in premarket trading Tuesday, hitting $147.76 following Monday’s close of $146.57. The uptick came after the company projected a steep jump in sales for 2026, driven by ongoing demand for its artificial intelligence software.
The forecast arrives as Wall Street wrestles with distinguishing genuine AI investment from the hype, with major earnings still ahead and the broader market hovering near record highs. The S&P 500 closed Monday just below its all-time peak, buoyed by an AI-driven rally. Investors now await earnings reports from Alphabet and Amazon this week. Meanwhile, a partial U.S. government shutdown has disrupted some economic data releases, muddying the picture for rate-sensitive growth stocks. (Reuters)
In its SEC filing, the company reported fourth-quarter revenue soared 70% to $1.407 billion. Adjusted earnings came in at 25 cents a share, fueled by a 137% jump in U.S. commercial revenue to $507 million and a 66% increase in U.S. government revenue to $570 million. It also announced it closed a record $4.262 billion in total contract value — the sum of deals signed — and finished the year holding $7.2 billion in cash and short-term U.S. Treasuries. Looking ahead, the company projects 2026 revenue between $7.182 billion and $7.198 billion, with adjusted free cash flow ranging from $3.925 billion to $4.125 billion. CEO Alex C. Karp commented, “We are an n of 1, and these numbers prove it.” (SEC)
Investors are watching to see if that revenue growth can continue without costs spiking, particularly as Palantir expands its AI platform from government contracts into the corporate world. Traders often look at the firm’s “Rule of 40” — combining revenue growth and operating margin — as a quick way to assess that balance.
MarketWatch highlighted the company’s emphasis on major U.S. defense contracts, including a U.S. Navy software agreement for ShipOS, and reported that average revenue from its top 20 customers jumped 45% to $94 million each. For investors assessing contract durability, those signals often outweigh a straightforward EPS beat. (MarketWatch)
Palantir’s expanding footprint in government surveillance is attracting new scrutiny. CEO Karp insists the company’s software has built-in safeguards against government overreach, even as its work with Immigration and Customs Enforcement raises eyebrows. Meanwhile, France’s Capgemini announced plans to sell a small U.S. unit holding an ICE contract after facing criticism. Palantir shares have tumbled more than 15% so far this year. Analyst Zavier Wong at eToro noted, “Valuation question marks won’t disappear … Palantir remains priced for perfection.” (Reuters)
Yet the stock often surrenders early gains when investors figure the guidance is baked in. If federal budgets or procurement programs stall — particularly if the shutdown drags on — contract flow could slow, putting a dent in Palantir’s growth narrative.
In the short term, traders will see if the move sticks as volume ramps up at the open. They’ll also be on the lookout for analyst reports that either question the company’s margin forecasts or focus more on the cash-flow projections.
One lingering question is the sales mix: while U.S. commercial sales have surged, the company still relies heavily on government contracts. Any shift in that balance could alter investor sentiment toward the stock.
The next key event arrives fast: the market opens at 9:30 a.m. ET, followed by a U.S. House vote later Tuesday aimed at ending the partial government shutdown that started over the weekend. For Palantir and other federal contractors, the outcome is crucial—it determines when agencies can resume funding and approve new projects. (Reuters)
