Palantir CEO Defends Surveillance Tech as Govt Contracts Boost Sales
Palantir Technologies CEO Alex Karp defended the company's surveillance systems, which saw a significant increase in revenue on Monday. He stated that the company has measures in place to prevent government misuse, though he did not address the ongoing protests related to U.S. immigration enforcement activities in Minnesota.
The data analytics company said revenue derived from the U.S. government spiked 66 percent in the fourth quarter from the year-ago period to $570 million. Total sales of $1.41 billion exceeded analysts' estimates and the firm anticipates a big jump in sales, in part due to government contracts in 2026. Shares of the company jumped five percent in extended trading.
Companies working with U.S Immigration and Customs Enforcement (ICE) are attracting more scrutiny as Americans have turned solidly against ICE's aggressive tactics following the fatal shootings of two U.S. citizens in separate incidents in January. The company won a contract last year with ICE to develop surveillance systems for immigration enforcement.
Over the weekend, France's CapGemini said it would sell a small U.S. unit that has a contract with ICE after criticism from French lawmakers and others.
In a post-earnings call, Karp said the company was "supporting in a critical manner, some of the most interesting, intricate, unusual operations that the U.S. government has been involved in", but did not specify which government programs Palantir was engaged in.
Denver-based Palantir has increasingly been marketing military-grade AI tools to businesses through its artificial intelligence platform that helps companies integrate and develop the technology. It has emerged as one of the best-performing AI stocks, with shares gaining 1,700 percent over the last three years.
"It should indeed be uncontroversial that the single most effective means of guarding against incursions into our private lives is to invest in the development of a technical platform that makes possible constraints on government action and investigation through granular permissioning capabilities," Karp said in a letter to shareholders.
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Karp says thatthe company's tech ensures that the "state and its agents can see only what ought to be seen, and functional audit logs, to ensnare both external and internal threats".
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Still, its shares are down more than 15 percent so far this month as Wall Street questions Palantir's sky-high valuation, with a 12-month-forward price-to-earnings ratio of 140.5.
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eToro analyst Zavier Wong says, "Valuation question marks won't disappear.Palantir remains priced for perfection, which means it will need to continue executing in future quarters."