Palantir (PLTR) raised its annual revenue outlook on Monday, citing its rapidly expanding sales of AI software to US businesses.
Palantir now forecasts it will rake in 2025 revenue between $3.89 billion and $3.9 billion, up from its prior estimate of $3.75 billion. That prior outlook had already surpassed Wall Street’s projections when it was given by the company during its fourth quarter earnings results Feb. 3, sending the stock soaring.
The firm’s increasingly optimistic financial outlook for the year was driven by its US commercial segment, which sells its software to medical providers like Mount Sinai and Cleveland Clinic, oil companies such as BP (BP) and Exxon (XOM), automakers such as Stellantis (STLA), and more.
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Palantir’s US commercial revenue jumped 71% to $255 million in the first quarter, ahead of the $239 million projected by Wall Street analysts tracked by Bloomberg.
“We have a $1 billion run rate in US commercial now, which is the gold standard for when a company has really broken through,” CEO Alex Karp told Yahoo Finance’s Josh Lipton Monday.
Palantir now expects its commercial business will grow 68% this year to reap $1.18 billion in revenue in 2025, up from the firm’s prior estimate of $1.08 billion, or 54% growth, for that segment.
Palantir’s data analytics and AI software is also used by militaries, government agencies, and police departments to the chagrin of human rights advocates and critics. It’s used to do everything from war planning and surveillance to supply chain management.
Palantir’s first quarter US government sales soared ahead of expectations, with revenue from US government contracts jumping 45% to $373 million, more than the $358 million expected.
The company was recently awarded a $30 million contract with ICE to surveil immigrants, though the deal has prompted concerns over potential rights violations. Palantir was also awarded a $178 million contract by the US army in March to develop AI military trucks. Palantir’s role in AI-enabled warfare has also come under criticism throughout the years.
Palantir’s overall revenue $884 million for the March period was ahead of the $863 million expected by Wall Street analysts, while its earnings per share of $0.13 were in line with estimates, according to Bloomberg data.
“We are very focused on making America more lethal and in a more efficient way. And we are succeeding,” Karp told Yahoo Finance.
Alex Karp, CEO of Palantir Technologies, speaks at the Hill and Valley Forum at the U.S. Capitol on April 30, 2025 in Washington, DC. (Photo by Kevin Dietsch/Getty Images) · Kevin Dietsch via Getty Images
In the aftermath of Defense Secretary Pete Hegseth’s cuts to the defense budget in April — focused on the agency’s spending on “consulting and other nonessential services” — the Trump administration has proposed bolstering the Pentagon’s budget by 13% in 2026 to spend greater sums on other areas such as AI.
“I don’t know what the future brings, but we believe we have a completely differentiated set of offerings,” Karp told Yahoo Finance of the potential defense budget boost.
Wedbush analyst Dan Ives said in a note to investors Monday of the company, “Palantir is well positioned for this new disciplined spending environment at the Pentagon and this will ultimately be a positive growth catalyst as PLTR gets a bigger seat at the table in the Beltway.”
Palantir stock is up more than 63% in 2024.
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at [email protected].
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