Palantir Technologies Inc. (PLTR) released its earnings report on Monday, revealing that both profit and revenue for the fourth quarter exceeded Wall Street expectations, driven by strong sales to the Trump administration and U.S. businesses. The company's stock surged 12% in Tuesday's premarket trading. The company's revenue for the quarter skyrocketed 70% year-over-year to $1.4 billion, surpassing the $1.3 billion consensus estimate from Wall Street analysts tracked by Bloomberg. Adjusted earnings per share rose to $0.25 from $0.14 in the same period last year, beating the market forecast of $0.23. Palantir issued first-quarter 2026 revenue guidance of $1.5 billion, which also topped the analyst estimate of $1.3 billion. Its full-year revenue outlook is approximately $7.2 billion, exceeding the market's expectation of $6.3 billion. The impressive fourth-quarter performance was primarily fueled by robust growth in domestic sales. Revenue from the U.S. commercial segment surged 137% to $507 million, beating the market expectation of $479 million. Revenue from the U.S. government segment jumped 66% to $570 million, exceeding the analyst estimate of $522 million for that division. Previously, Palantir's stock had been under pressure due to a broad sell-off in software shares and market concerns over the company's high valuation. Over the past month, the stock had declined by approximately 12%, aligning with the overall downward trend for software companies within the S&P 500 index, largely driven by investor fears that artificial intelligence technology could displace established software firms. Ahead of the earnings release, CEO Alex Karp, in an interview with Yahoo Finance's Josh Lipton, acknowledged that AI could indeed pose a significant challenge for software providers. He stated, "In the technology sector, companies only have a window of a few years to thrive; no one is guaranteed immunity from disruption. However, we began investing in AI-related technologies years ago, convinced at the time that these investments would ultimately create value." Karp also remarked that "the products and corporate culture we have built are perfectly suited to the current market environment," and described Palantir as "a different kind of company." On Monday, William Blair analyst Louis DiPalma upgraded Palantir's stock rating from "Market Perform" to "Outperform," stating that the recent pullback in the share price has made its valuation "more reasonable." He also referenced Palantir's collaboration with the Trump administration—though this partnership, including services provided to U.S. Immigration and Customs Enforcement, has drawn significant public criticism.