Palantir Warns Against DeepSeek AI, Predicts 2025 Revenue Surge

  • Palantir (PLTR) has advised its clients against using AI models from Chinese startup DeepSeek due to national security concerns, aligning with actions by U.S. federal agencies.
  • The company reported strong Q4 financials with earnings of $0.14 per share, surpassing expectations, and a 36% year-over-year revenue increase to $827.52 million.
  • Palantir forecasts robust future growth, projecting first-quarter revenues between $858 million and $862 million, and full-year 2025 revenues between $3.741 billion and $3.757 billion, significantly above analyst estimates.

palantir

In a rapidly evolving tech landscape where artificial intelligence (AI) models are becoming central to business and governmental operations, Palantir (PLTR) has advised its clients to avoid using AI models developed by the Chinese startup DeepSeek. This recommendation comes amidst rising concerns over national security and the competitive dynamics between the U.S. and China in the AI sector.

Palantir’s Chief Revenue Officer, Ryan Taylor, explicitly warned against the use of DeepSeek’s technology, stating that no U.S. government customer would likely be allowed to employ it. This caution is not isolated, as the White House and federal agencies like NASA have already taken steps to restrict or ban such technology due to security implications.

The backdrop to these warnings is a broader strategic concern about the U.S. maintaining its lead in AI technology, especially as Chinese firms begin to make significant strides. This situation underscores a growing tension in the global tech race, where AI not only represents an economic frontier but also a national security battleground.

Simultaneously, Palantir itself is experiencing a robust financial upturn. In the fourth quarter, the company reported earnings of $0.14 per share, excluding non-recurring items, which was $0.03 better than the consensus estimate of $0.11. Revenues for the quarter rose to $827.5 million, marking a 36% year-over-year increase and beating the consensus estimate of $775.9 million. Specifically, U.S. commercial revenue saw a 64% increase year-over-year to $214 million, while U.S. government revenue grew by 45% to $343 million. The customer count also expanded significantly, growing 43% year-over-year.

Looking forward, Palantir, which experienced a significant surge in its stock price, jumping $18.82 or 22.47% to $102.56 in after-hours trading on Monday, guided its first-quarter revenues to be between $858 million and $862 million, far exceeding the consensus estimate of $799.4 million. For the full year 2025, the company projects revenues to reach between $3.741 billion and $3.757 billion, against the consensus forecast of $3.5 billion. The expected adjusted operating income for 2025 is set at approximately $1.56 billion, compared to the analysts’ average projection of $1.37 billion.

This financial performance and optimistic outlook are set against a backdrop where businesses are pushing to deploy generative AI technologies, driving sales for Palantir’s AI platform, AIP. Palantir’s vision aligns well with the current U.S. administration, according to D.A. Davidson analyst Gil Luria, which could further bolster its government contracts.

However, the company also aims to reduce its dependence on government spending by growing its commercial sector, expecting U.S. company-derived revenue to increase by at least 54% in 2025 to more than $1.80 billion.

The expanded tariffs ordered by President Donald Trump on Saturday might also drive demand for Palantir’s analytics services, particularly in supply-chain and logistics management, highlighting how geopolitical decisions can directly influence tech sector dynamics. Thus, while Palantir advises caution regarding certain foreign AI technologies, it is simultaneously capitalizing on the very technological advancements and market demands that such advice underscores.

WallStreetPit does not provide investment advice. All rights reserved.

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