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Palantir shares surged 25 per cent to a record on Tuesday after Peter Thiel’s data analytics company raised its 2025 outlook and projected a windfall from President Donald Trump’s overhaul of the federal government.
Chief executive Alex Karp said that work by billionaire Elon Musk and the cost-cutting “Department of Government Efficiency” (Doge) he leads would be “good for Americans” and “very good for Palantir”, which generates about two-thirds of its US-based revenue from government contracts.
“Disruption at the end of the day exposes things that aren’t working. There’ll be ups and downs,” Karp told analysts after Palantir reported fourth-quarter results following the stock market’s close on Monday.
“This is a revolution. Some people will get their heads cut off . . . We’re expecting to see really unexpected things and to win.”
His comments came as Musk shows signs of wielding significant power within the administration, including reports Doge has gained access to review the US Treasury’s vast payments system.
Palantir shares shot up 25 per cent to $104.70 in early trading on Tuesday. The stock, which joined the S&P 500 in September, rose 340 per cent in 2024 and was the top performer in Wall Street’s benchmark index.
Alongside its fourth-quarter results, Palantir said it expected to generate revenue of between $3.74bn and $3.76bn in 2025, above analysts’ forecasts of $3.54bn.
Palantir is set to benefit from Trump’s second term in office, with the president signalling he will increase spending on national security, space and immigration.
Launched in 2003 by technology entrepreneurs including Thiel, its chair, and Karp, Palantir supplies software to governments and companies for collating, analysing and producing intelligence from large data sets. Thiel is a significant donor to Republican causes.
Palantir’s revenue leapt 36 per cent from a year earlier to a forecast-beating $828mn in the fourth quarter, helped by a 45 per cent jump in US government revenue. Net income fell to $79mn, weighed down by $132mn in stock-based compensation expenses.
The company has taken advantage of a growing interest in Silicon Valley to work in defence and entered into a partnership with weapons maker Anduril Industries last year in a move it said would disrupt the country’s oligopoly of “prime” contractors.
Palantir also signed a deal with Amazon Web Services and artificial intelligence start-up Anthropic in November to provide US intelligence and defence agencies access to its Claude chatbot.
The partnership came ahead of the release last month of China’s DeepSeek R1 model, which triggered a market sell-off and raised concerns about the moat around large US tech companies’ large language models. The US Navy and Pentagon have blocked access on security grounds.
Shyam Sankar, Palantir’s chief technology officer, said DeepSeek’s achievement indicated that models were becoming more commoditised but that it also signalled that the US was “at war with China”.
“We are in an AI arms race,” he said.
