Palantir stock is soaring Tuesday after the AI software giant beat Q4 expectations and gave a strong outlook for the year ahead. Here's what you should know.

Shares of data-mining and analytics company Palantir (NYSE:PLTR) jumped 26.9% in the morning session after the company reported impressive fourth-quarter results, which blew past analysts' billings, revenue,

Palantir's Q4 results were astounding, "eviscerating" (their words in the press release) the consensus. I looked that up—it means "disemboweling." Revenue skyrocketed 36% YoYr, and its free cash flow (FCF) margin hit 63%—both disemboweling consensus estimates.

Palantir Technologies (PLTR) is soaring to record highs after upbeat fourth-quarter results and a strong 2025 forecast, with help from AI

Palantir continues to reap the rewards of its decades of AI expertise. The stock is expensive, so investors should exercise care. In the fourth quarter, Palantir generated revenue that accelerated to 36% year over year (and 14% sequentially) to $828 million.

Palantir executives welcomed the advent of low-cost artificial intelligence. Other software stocks could also see benefits from cheaper AI.

The AI-focused Palantir joins a group of less than 50 public American companies worth at least $200 billion, quite the turn of events for the government contractor worth less than $20 billion two years ago.