Palantir Technologies CEO Alex Karp defended the company’s surveillance software after the data analytics firm posted a sharp rise in U.S. government revenue, saying its systems include safeguards meant to curb abuse by authorities.
The Denver-based company reported that revenue from U.S. government clients jumped 66% in the fourth quarter 2025 from a year earlier to $570 million. Total revenue reached $1.41 billion, topping Wall Street expectations. Palantir said it expects further growth, driven partly by new and expanded government contracts heading into 2026.
Shares rose about 5% in extended U.S. trading, while the stock gained nearly 12% in early trading in Frankfurt.
Palantir wins $30 million ICE deal
Palantir’s expanding role with U.S. agencies comes as companies linked to Immigration and Customs Enforcement face growing criticism. Public anger has mounted following protests over immigration enforcement tactics, including demonstrations in Minnesota.
Palantir won a contract last year with ICE to develop surveillance systems used in immigration enforcement. In April, the company secured a $30 million ICE contract to build tools that identify undocumented immigrants and track self-deportations. It was Palantir’s largest single award from the agency to date.
Over the weekend, France’s Capgemini said it would sell a small U.S. unit with an ICE contract after criticism from French lawmakers.
On an earnings call, Karp said Palantir was supporting “complex and sensitive” U.S. government operations but did not specify which programs the company was involved in.
Palantir expands AI tools commercially
Palantir has also been pushing its artificial intelligence platform into the private sector, offering tools originally designed for defense and intelligence agencies to commercial clients. The company has been one of the strongest performers among AI-linked stocks, with shares up about 1,700% over the past three years.
In a letter to shareholders, Karp said Palantir’s technology is designed to limit access to data, using permission controls and audit logs so officials “see only what ought to be seen.”
Despite the long-term rally, Palantir shares are down more than 15% this year. Investors remain uneasy about valuation, with the stock trading at more than 140 times forward earnings.
“Valuation concerns aren’t going away,” said eToro analyst Zavier Wong. “The stock leaves little room for mistakes.”
Palantir projects $1.54 billion Q1 revenue
Founded in 2003 by Karp, Peter Thiel, and others, Palantir initially focused on counterterrorism and fraud detection. Under Karp, the company has expanded into commercial clients alongside defense and intelligence agencies.
Palantir forecast first-quarter sales of $1.53 billion to $1.54 billion, above analyst estimates of $1.32 compiled by LSEG. The company expects 2026 revenue of about $7.2 billion, more than 60% higher than 2025.
Last month, Palantir also announced a multimillion-dollar AI deal with South Korea’s HD Hyundai, expanding a partnership aimed at speeding up shipbuilding.
Palantir Technologies
