Palantir (PLTR) recently released fourth-quarter 2025 results that topped analyst estimates. Revenue grew 70% to $1.41 billion, while adjusted earnings per share came in at $0.25 versus expectations of $0.23. Full-year revenue was $4.48 billion, and management expects 2026 revenue to reach $7.19 billion, a 61% year-over-year increase. That’s almost $1 billion more than consensus had previously predicted.
As expected, PLTR stock rose following the report, but this did not last long. Shares are down 3% over the past five days and the reaction tells you everything about where Palantir stands in the market imagination. The stock is loved for its fundamentals and feared for its valuation.
Should you chase the run and buy the shares at a discount, or is PLTR going even lower? Let’s take a look at what’s been happening.
US business revenue soared 137% year-over-year in the fourth quarter, reaching $507 million, while total US revenue grew 93% year-over-year to $1.08 billion. For the full year, U.S. business revenue more than doubled, rising 109% to $1.47 billion. What makes these figures truly remarkable is the customer behavior behind them. The number of Palantir customers increased 34% year-on-year to 954.
Not only that, the company closed $4.26 billion in contracts during the fourth quarter alone, a 138% year-over-year increase. Existing customers are quadrupling and quintupling their commitments. This shows that once Palantir gets its foot in the door, it can start taking over operations at both enterprises and government institutions very quickly. It’s a win-win for Palantir and its customers, as one shipbuilder reduced its planning time from 160 hours to 10 minutes. A push like this offsets very difficult customer relationships and opens the door to new deals.
Additionally, adjusted free cash flow for the fourth quarter reached $791 million with a margin of 56%. For the full year, the metric reached $2.27 billion with a margin of 51%. These numbers are truly incredible, even for a software company.
Palantir’s valuation is primarily where things start to go wrong. The company has an impeccable track record, but Wall Street is no longer willing to pay a huge premium for it. That may have a lot to do with the broader market going into “risk aversion” mode by dumping speculative assets and piling into safer ones.
