Palantir Earnings Drive Volatile Rally
Palantir earnings showed record fourth-quarter revenue and strong commercial AI demand, and an elevated Rule of Forty prompted weeklong share swings.
KEY TAKEAWAYS
- Palantir reported record Q4 revenue that beat expectations, driven by commercial AI demand.
- U.S. commercial revenue rose 64% year-over-year in Q4.
- The company posted a Rule of 40 score of 127%, signaling rare profitable expansion.
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Palantir Technologies (PLTR) reported Q4 2025 results on Feb. 3, 2026, with record revenue that beat expectations, driven by strong demand for commercial AI. U.S. commercial revenue rose sharply, and shares experienced volatility over the following 48 hours.
Record Revenue and Profitability
Palantir’s Q4 2025 revenue reached a record level, surpassing Wall Street estimates. The company attributed this growth to rising demand from private-sector customers for AI software and services. U.S. commercial revenue increased 64% year-over-year in the quarter.
The company posted a Rule of 40 score of 127%, a combined measure of revenue growth and adjusted operating margin that signals rare profitable expansion. Management issued a Q1 2026 outlook after the quarter, which helped fuel an initial positive investor response.
CEO Remarks and Share Volatility
Chief Executive Alex Karp emphasized Palantir’s focus on "agentic AI," a human-empowering application layer the company is advancing in commercial deployments. On Feb. 4, 2026, at 13:36 ET, Karp criticized inflated valuations in the AI sector, positioning Palantir as a company focused on applied, revenue-generating AI rather than speculative investment themes.
A post-earnings selloff occurred on Feb. 4 at 12:42 ET amid broad AI-sector volatility, reducing some of the initial gains after the earnings release and guidance. The combination of strong commercial growth, the high Rule of 40 score, and Karp’s comments on valuation reframed investor debate around Palantir as a commercially driven AI operator and explained the intraweek swings in the stock.
