Core Insights - Palantir reported $1.41 billion in revenue, exceeding LSEG estimates of $1.33 billion, with CEO Alex Karp claiming these are the best results in tech over the last decade [1] - The company's stock rose 10% in premarket trading after beating Wall Street's fourth quarter estimates, driven by increased spending on AI tools from both government and business sectors [2] - Palantir's revenue from U.S. government contracts grew by 66% year-on-year, highlighting strong demand for its software and data tools [2] Government Contracts - Palantir secured a software contract worth up to $10 billion with the U.S. Army in July and a $448 million deal with the U.S. Navy in December to enhance shipbuilding production [3] - The company is expected to see its operating margin increase from 50% to 65% over the next five years due to a rise in government and defense contracts [4] Market Sentiment - Despite a 135% increase in stock value in 2025, Palantir's shares were down 17% year-to-date as of the latest report, following a challenging end to 2025 [1] - Analyst Louie DiPalma noted that while Palantir's valuation remains high, it appears more reasonable compared to recent venture rounds in the AI sector [3] - Recent scrutiny has arisen regarding Palantir's work with U.S. Immigration and Customs Enforcement (ICE) following controversial incidents involving federal agents [4]