Charles Esther
Palantir CEO Alex Karp is crediting the ongoing surge in defense technology for the company’s strong first quarter in 2025.
On Monday’s earnings call, Karp praised a cultural shift in the U.S. and the results of two decades of investment as key factors behind the company’s performance.
“Our success is a product of an unvarnished cacophony of the combination of 20 years of investment and a massive cultural shift in the U.S.,” Karp said.
He added that “culturally, we just don’t see the resistance to the way we roll that we did in the past.”
Strong AI Momentum Boosts Forecast
Palantir lifted its full-year revenue forecast thanks to strong momentum in AI software sales.
The company now expects annual revenue to fall between $3.89 billion and $3.90 billion.
This is a notable increase from the previous midpoint estimate of $3.75 billion.
This upward revision comes in contrast to many companies this earnings season that have reduced or withdrawn guidance entirely.
Record Growth Across Commercial and Government Sectors
Palantir posted robust revenue figures across the board.
U.S. commercial revenue jumped 71% year-over-year, reaching $255 million.
U.S. government revenue also surged to $373 million, reflecting a 45% increase from the previous year.
Overall, Palantir’s total revenue rose by 39% compared to last year.
This exceeded the high end of its prior guidance by nearly 350 basis points.
Stock Soars in 2025 Despite After-Hours Dip
Palantir’s stock has surged more than 64% in 2025 so far.
It climbed from just over $75 per share in early January to over $123 by the close of trading on Monday.
The stock reached a peak of nearly $125 in mid-February.
However, shares dipped over 8% in after-hours trading following the earnings call.
Palantir Doubles Down on AI Agents for Defence
Chief Technology Officer Shyam Sankar said the company is moving into the next phase of AI product development.
Palantir’s enterprise-focused AI platform is evolving, with a particular focus on military applications.
“AI agents aren’t just transforming the U.S. commercial sector — they are transforming how we fight,” Sankar explained.
These AI systems are now being used to analyse intelligence, identify targets, automate operations, and improve battlefield awareness.
Defense Contracts and Government Spending Cuts
Despite the growing appetite for defense tech, the U.S. government cut more than $5 billion in Defense Department contracts in April.
When asked about the impact of budget cuts, Sankar responded by calling Department of Government Employees (DOGE) “heroes.”
He argued that cutting wasteful spending allows more effective projects to thrive.
“We have way too much spend on things that do not work,” he said.
“The government has started to resemble a fine-marbled wagyu — the fake projects that do not deliver and will never deliver crowd out and suffocate the things that could actually be excellent, so we welcome DOGE.”
Karp also noted that Palantir performs best under pressure.
“We do exceptionally well when things are pen-tested,” he said.
Delivery of AI-Powered TITAN Ground Vehicles
In Q1 2025, Palantir delivered its first AI-powered TITAN ground vehicles to the U.S. Army.
This milestone was achieved in partnership with traditional defense contractors such as Northrop Grumman and L3 Harris, as well as innovative startups like Anduril.
Karp and Sankar on American Reindustrialization
Sankar highlighted a broader movement toward American manufacturing.
He attributed this trend to a generation influenced by Elon Musk, who he said “have learned and understood how to actually make things.”
“That’s like the basis of reindustrialization in America,” Sankar added.
