Palantir’s stock price is back on the rise. This 1 factor may determine if shares keep going up

Shares in Palantir Technologies (Nasdaq: PLTR) are rising this morning, one day after the AI data analysis software company with significant U.S. government contracts reported better-than-expected Q4 earnings. Here’s what you need to know about Palantir’s latest results and its rising stock price.

Palantir’s Q4 2025 beat Wall Street expectations

Yesterday, Palantir announced its Q4 2025 earnings, and investors breathed a sigh of relief. For Palantir’s Q4, which ended on December 31, the company brought in $1.41 billion in revenue, signaling 70% year-over-year growth. 

The majority of that revenue comes from Palantir’s U.S. customers, which is split roughly evenly between the U.S. government and commercial U.S. businesses.

Palantir said U.S. government revenue totaled $570 million for the quarter, representing 66% year-over-year growth in that vertical. U.S. commercial revenue totaled $507 million—137% year-over-year growth.

But more important than those actuals was what Wall Street had been expecting. And Palantir easily surpassed those expectations, leading to the rapid rise in its stock price today.

As cited by CNBC, London Stock Exchange Group (LSEG) estimates expected Palantir to bring in $1.33 billion for the quarter. The company ended up surpassing that estimate by around $80 million.

Analysts were also expecting an earnings per share (EPS) of 23 cents. Palantir’s actual EPS for the quarter was 25 cents.

PLTR shares are still down from their all-time highs

Palantir released its earnings results after the closing bell yesterday, and today its stock price is reaping the rewards of those results, enjoying double-digit growth in premarket trading.

As of this writing, PLTR shares are up 11.35% to $164.55. The company’s share had closed at $147.76 yesterday.

That share price pop will be music to the ears of Palantir investors. Before this morning’s premarket trading bump, PLTR shares were down nearly 17% year-to-date.

Its current premarket price rise doesn’t quite put PLTR shares back in the black for the year, but it’s definitely a move in the right direction.

Palantir shares had hit an all-time high of above $207 in November, after seeing a phenomenal year of growth.

The previous November, in 2024, started with shares sitting in the low-40s range. But increasing government contracts and AI optimism throughout the remainder of 2024 and into 2025 sent PLTR shares surging.

Then came December 2025, and PLTR shares got pummeled. Between December 24 and 31, the company’s stock price fell from the $194 range to around $177. That fall reflected both rising concerns about Palantir’s lofty valuation and broader worries about a potential AI bubble.

Where does PLTR go from here?

Despite Palantir beating expectations for Q4, the future of its stock price likely hinges on its ability—or not—to continue delivering results that justify its valuation.

As of yesterday’s close, Palantir was valued at around $352 billion and traded at a price-to-earnings ratio of more than 230, which is incredibly high for even a tech company.

The company’s stock price could also be significantly impacted if upcoming Big Tech earnings do not meet expectations and thus reignite fears of an AI bubble. If investors turn sour on AI stocks, Palantir shares could once again be hit hard.

For instance, Google parent Alphabet—the best performing of the so-called Magnificent 7 tech stocks—will report earnings on Wednesday. Fellow tech giant Amazon will report the following day. Later this month, meanwhile, AI chip giant Nvidia Corporation will report its results.

Investor sentiment around AI could be deeply impacted by the results of any one of those companies.

As for Palantir itself, the firm issued guidance yesterday for both its current Q1 2026 and its full-year 2026.

For its Q1, Palantir said it expects revenue of between $1.53 billion and $1.54 billion. That’s more than the $1.32 billion that many analysts were expecting. For its full-year 2026, Palantir expects revenue of $7.18 billion to $7.2 billion. That is nearly $1 billion more than many analysts were expecting. 

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