Palantir Technologies, a data analytics behemoth, reported a substantial increase in revenue on Monday, with CEO Alex Karp leading a fierce defense of the company’s surveillance technology in the face of mounting criticism about its use in government.
The Denver-based company reported stellar fourth-quarter earnings, with revenue from the U.S. government rising 66% from a year ago to $570 million. The company’s total revenue of $1.41 billion topped analysts’ estimates, driving the stock up 5% in after-hours trading. The company’s Frankfurt-listed shares rose nearly 12% in early trading Tuesday.
Palantir is, however, at the forefront of a contentious debate about its contract with U.S. Immigration and Customs Enforcement. The company won a $30 million contract with ICE in April to build systems to locate undocumented immigrants and monitor self-deportations, its largest single contract with the agency out of 46 federal contract awards since 2011.
The timing of these findings is also significant as companies partnering with ICE are coming under increasing pressure.
There has been a rapid shift in public opinion against the aggressive methods of enforcement used by ICE in the wake of the fatal shooting of two U.S. citizens in separate incidents in January this year. Just last weekend, France’s Capgemini announced that it would sell a small U.S. unit that holds an ICE contract due to criticism from French lawmakers.
Palantir Targets $7B Revenue Milestone Amid Growing Government Partnerships
In the course of the post-earnings conference call, Karp did admit that Palantir is “supporting in a critical manner, some of the most interesting, intricate, unusual operations that the U.S. government has been involved in,” although he did not point to any specific programs. Significantly, he did not refer to the contentious immigration enforcement program in Minnesota that has led to widespread protests.
Rather, Karp chose to defend the company’s technology on privacy grounds. In a letter to shareholders, he wrote that “the most effective way to protect against government abuse is to invest in technical infrastructure that imposes its own limitations.” Karp asserted that Palantir’s technology allows “the state and its agents to see only what they should see,” with functional audit trails to detect both external and internal threats.
“Freedom from unwarranted government surveillance requires the construction of a technical system that is built to make possible oversight of its own use and limit, not expand, the material and information subject to access,” Karp wrote.
The overall business outlook for the company remains highly favorable. Palantir has forecasted its revenue for 2026 to be between $7.18 billion and $7.20 billion, a rise of over 60% from last year. The company also expects its first-quarter revenue to touch $1.53 billion to $1.54 billion, significantly higher than the estimated $1.32 billion.
Sky-High Valuations Meet the Tightrope of Ethics and Growth
What is most noteworthy, however, is the rise in the company’s commercial business. The company has forecasted its sales in 2026 to increase at least 115% to over $3.14 billion in the U.S. commercial market, an acceleration from the already strong 109% growth in 2025.
This is a result of Palantir’s success in promoting its military-grade artificial intelligence software to commercial customers via its AI platform, which enables companies to develop the technology.
The firm has proved to be one of the most successful AI stocks, with its shares rising a staggering 1,700% over the last three years. However, this has also raised concerns about the firm’s valuation, with its shares falling over 15% so far this year as investors wonder if the stock price has detached from reality. Palantir is currently trading at a 12-month forward price-to-earnings ratio of 140.5.
“Valuation question marks won’t disappear,” noted eToro analyst Zavier Wong. “Palantir remains priced for perfection, which means it will need to continue executing in future quarters.”
Palantir was founded by tech mogul Peter Thiel, who founded the firm with the CIA as one of its early investors. The political connections of Thiel are extensive—he was an early supporter of President Donald Trump and remains close to key lawmakers in Washington, including Vice President JD Vance, whom he supported in a 2022 Senate election.
As Palantir continues to grow its government and commercial business, the firm finds itself facing a tricky tightrope: meeting the strong surveillance needs of government agencies while also responding to public concerns about privacy and civil liberties in the face of growing technological surveillance.
