Palantir Technologies delivered another powerful quarter that left Wall Street scrambling to adjust its expectations.
The company’s stock jumped 7% on Monday after revealing financial results that blew past estimates and showcased its growing dominance in both government and commercial AI markets.
Instead of slowing under pressure from the ongoing U.S. government shutdown, Palantir expanded at a pace rarely seen in established tech firms. Third-quarter revenue reached $1.18 billion, comfortably above analysts’ $1.09 billion forecast. Profitability also exceeded expectations, with earnings of 21 cents per share versus projections of 17 cents.
Strong Guidance Defies Market Headwinds
Executives now anticipate a much stronger fourth quarter, projecting around $1.33 billion in revenue. That’s a sharp increase from the $1.19 billion Wall Street had penciled in. Palantir also raised its full-year outlook to $4.4 billion for 2025, surpassing the previous consensus of $4.17 billion.
Government contracts, traditionally Palantir’s foundation, continued to flourish despite federal funding uncertainties. Revenue from this segment soared 52% year-over-year to $486 million, reflecting the resilience of key defense and intelligence partnerships — including its multi-year U.S. Army deal, valued in the billions.
Commercial Business Becomes the Star Performer
While its federal ties remain critical, Palantir’s biggest surprise came from its commercial division. Corporate revenue more than doubled to $397 million, driven by a surge in AI adoption across industries. Newly signed deals reached a record $1.31 billion, up over fourfold from the same period a year earlier.
To strengthen its reach in the private sector, Palantir struck partnerships with Snowflake, Nvidia, and Lumen — collaborations designed to embed its data analytics tools deeper into enterprise AI ecosystems. CEO Alex Karp described the company’s rise as fueled by “real demand,” contrasting it with what he called speculative hype in the broader AI market.
Profit Explosion and Investor Frenzy
Net income soared to $475.6 million, marking a staggering 230% increase from the prior year. Total revenue grew 63% year-over-year, continuing a streak of rapid expansion that now positions Palantir among the elite tier of global software players.
Free cash flow is forecast between $1.9 billion and $2.1 billion by the end of the year, further underscoring the company’s ability to scale without sacrificing profitability.
Valuation Soars Past $490 Billion
Investors have rewarded that growth handsomely. Palantir’s market capitalization has now exceeded $490 billion, with shares up more than 170% since January. That places the company alongside the world’s most valuable tech giants — though not without controversy.
Analysts remain divided, cautioning that the stock’s valuation may be detached from reality given its still-modest revenue base compared to software heavyweights like Microsoft or Oracle.
In his latest shareholder letter, Karp defended the company’s meteoric rise, saying Palantir had enabled “ordinary investors to achieve returns once reserved for Silicon Valley’s top venture funds.” He also took a jab at detractors, suggesting critics had been left “bewildered by the company’s success.”
With its AI-driven expansion showing no signs of fatigue, Palantir’s story has evolved from a defense contractor into one of the most closely watched growth engines in the global tech landscape.
