Palantir Technologies Inc. (NASDAQ:PLTR) saw its shares climb about 5% after the company published its outlook for 2026, which came in notably ahead of analysts' expectations. Investors reacted to projections for revenue, adjusted operating income and free cash flow that exceeded consensus, following a quarter that delivered both top-line growth and marked margin improvement.
Performance metrics for the trailing year remain stark. According to InvestingPro data cited with the company's results, Palantir has produced a 79.14% return over the past 12 months despite recent swings in market price, and the stock had declined 11.76% in the previous week before the move.
Analyst coverage has reflected the mixed read on the company. William Blair reiterated an Outperform rating on Palantir, highlighting the firm's fourth-quarter prints and its Dotted Line tracker as evidence that the U.S. Department of War is increasingly turning to Palantir's data analytics platforms for mission-critical tasks. The note referenced recent government awards including a $448 million two-year contract from the U.S. Navy aimed at submarine manufacturing optimization and a $646 million Glacier Bay contract from the National Geospatial Intelligence Agency. Elsewhere in the coverage included with the results, William Blair is also described as having upgraded Palantir's stock rating to Outperform, citing ongoing momentum across government and commercial end markets.
By contrast, RBC Capital maintained an Underperform stance with a $50.00 price target, despite acknowledging that fourth-quarter revenue beat consensus by roughly 5%.
Quarterly results and company-provided 2026 outlook
Palantir reported fourth-quarter revenue of $1.41 billion, versus a consensus estimate of $1.34 billion. The company described the quarter as a record, with year-over-year revenue growth of 70% and strong expansion within the United States: total U.S. revenue rose 93% to $1.08 billion. U.S. commercial revenue accelerated to $507 million, up 137% year-over-year and accelerating from 121% growth in the prior quarter. U.S. government revenue increased 66% to $570 million.
On the profitability side, adjusted operating income was $798 million, beating the consensus of $701 million, and operating margin improved to 57% from 51% in the previous quarter. These profitability metrics align with InvestingPro data showing an 80.81% gross profit margin and 47.23% revenue growth over the last twelve months.
For fiscal 2026, Palantir set out targets that materially exceed consensus: approximately $7.2 billion in revenue compared with $6.3 billion consensus; adjusted operating income of $4.1 billion versus a $3.1 billion consensus; and free cash flow of roughly $4.0 billion.
Valuation, market capitalization and third-party commentary
Using an after-hours share price of $158, Palantir's market capitalization was reported at $406 billion. That figure was placed in context among other high-profile AI and data companies cited alongside Palantir: between Anthropic at $360 billion and OpenAI in a $750-830 billion range, and well above Databricks at $134 billion. InvestingPro flagged Palantir as currently overvalued on traditional metrics, noting a P/E ratio of 342.34 and generally high valuation multiples across the business.
Additional items noted in relation to Palantir's ecosystem included a contract with Innodata Inc. to provide data engineering services for AI-enabled platforms tied to rodeo event analysis, delivering annotation and data engineering for thousands of hours of video footage. Separately, cybersecurity startup Outtake, founded by a former Palantir engineer, raised $40 million in funding; that development was described as indirectly related to Palantir.
What the numbers mean
Palantir's Q4 results show simultaneous revenue acceleration and margin expansion, driven by rapid U.S. commercial growth alongside continuing government demand. The 2026 guidance implies a substantial step-up in scale and cash generation compared with consensus expectations, while third-party analysis points to elevated valuation multiples that some investors may view as a headwind to further share gains absent continued execution.