Palantir Technologies CEO Alex Karp defended the company’s surveillance technology on Monday as Palantir reported a sharp increase in revenue. Karp said the firm’s systems include built-in safeguards designed to limit government overreach, while avoiding direct reference to U.S. immigration enforcement activities in Minnesota that have sparked widespread protests.
The data analytics company said revenue from U.S. government clients surged 66% in the fourth quarter compared with a year earlier, reaching $570 million. Total revenue climbed to $1.41 billion, beating analyst expectations. Palantir also forecast strong future growth, driven in part by expanding government contracts through 2026.
Investor reaction was positive, with shares rising about 5% in after-hours trading. Palantir’s Frankfurt-listed stock also jumped nearly 12% in thin early trading on Tuesday.
Companies linked to U.S. Immigration and Customs Enforcement have come under increasing scrutiny after public opinion turned sharply against the agency’s aggressive tactics, following fatal shootings of two U.S. citizens in separate incidents in January. Palantir secured a contract last year with ICE to develop surveillance systems for immigration enforcement.
Over the weekend, Capgemini said it would divest a small U.S. business unit tied to an ICE contract after facing criticism from French lawmakers and civil society groups.
During an earnings call, Karp said Palantir was playing a critical role in supporting some of the most complex and sensitive operations undertaken by the U.S. government, without detailing the specific programs involved.
The Denver-based company has increasingly marketed military-grade artificial intelligence tools to commercial clients through its AI platform, which helps organizations integrate and deploy advanced analytics. Palantir has become one of the strongest-performing AI-related stocks in recent years, with shares rising roughly 1,700% over the past three years.
In a letter to shareholders, Karp argued that effective protection against unwarranted surveillance requires investment in technology that enables strict oversight and granular access controls. He said Palantir’s systems are designed so government agencies can access only authorized data, supported by detailed audit logs that help detect both internal and external threats.
Despite the strong growth, Palantir shares are down more than 15% so far this year, as investors question the company’s valuation. The stock currently trades at a forward price-to-earnings ratio of about 140.
“Valuation concerns are unlikely to fade anytime soon,” said Zavier Wong, an analyst at eToro. “Palantir is priced for near-perfect execution, meaning it must continue delivering strong results in coming quarters.”
Strong revenue growth outlook
Founded by tech billionaire Peter Thiel, with the CIA among its early backers, Palantir has expanded rapidly through a steady stream of government contracts. The company expects revenue of between $7.18 billion and $7.20 billion in 2026, representing growth of more than 60% compared with 2025.
Thiel was an early supporter of Donald Trump and maintains close ties with influential lawmakers in Washington, including Vice President JD Vance, whom he backed during a 2022 U.S. Senate race.
In April, Palantir secured a $30 million ICE contract to develop a system that identifies undocumented immigrants and tracks voluntary departures. As of June 3, it marked the company’s largest single award from ICE among 46 federal contracts awarded since 2011.
Karp reiterated that protecting individual freedoms requires technology that limits, rather than expands, government access to sensitive information, while ensuring accountability through built-in oversight mechanisms.
Looking ahead, Palantir forecast first-quarter revenue of $1.53 billion to $1.54 billion, well above market expectations of $1.32 billion, according to LSEG data.
Sales to U.S. commercial customers are expected to grow at least 115% in 2026 to more than $3.14 billion, accelerating from 109% growth recorded in 2025.
