Palantir reported quarterly results that topped analysts’ estimates and issued better-than-expected guidance for the fourth quarter, attributing much of its strength to artificial intelligence. The stock rose about 1% in extended trading.

Here’s how the company did compared to LSEG estimates:

Earnings per share: 21 cents adjusted vs. 17 cents expected

Revenues: $1.18 billion vs. $1.09 billion expected

Palantir, which builds analytics tools for large companies and government agencies, said it expects revenue of about $1.33 billion for the current period, exceeding the $1.19 billion expected by analysts, according to LSEG.

The optimistic guidance comes even as the government shutdown stretches into its second calendar month, and potentially threatens some key contracts. Revenue in Palantir’s U.S. government business grew 52% in the quarter from a year ago to $486 million.

Government sales, particularly from military agencies, have been central to Palantir’s ongoing ascent. Over the years, Palantir has steadily beat out major legacy government contractors, and recently landed a deal worth up to $10 billion contract with the U.S. Army.

Palantir has also faced criticism over how its tools are being used by government agencies, including U.S. Immigration and Customs Enforcement.

Total revenue in the quarter jumped 63% from $725.5 million a year ago, exceeding $1 billion for the second straight quarter. Net income more than tripled to $475.6 million, or 18 cents per share, from $143.5 million, or 6 cents per share, a year earlier.

For the full year, Palantir now expects about $4.4 billion in sales, topping the $4.17 billion forecast by Wall Street. The company also bumped up its full-year free cash flow outlook to between $1.9 billion and $2.1 billion.

Palantir’s U.S. commercial business more than doubled to $397 million. Total contract value for U.S. commercial deals closed more than quadrupled to $1.31 billion. Over the last few weeks, the company has announced new partnerships with Snowflake, Lumen and Nvidia.

Retail investors have helped drive Palantir’s skyrocketing stock price to new heights. The shares have surged more than 170% this year, lifting the company’s market cap past $490 billion and cementing the company among the most valuable technology names in the world.

Analysts have raised concerns about the stock, which trades at an extreme multiple relative to technology behemoths with far more revenue. In a letter to shareholders, CEO Alex Karp called out the “detractors” who have been “left in a kind of deranged and self-destructive befuddlement.”

“The reality is that Palantir has made it possible for retail investors to achieve rates of return previously limited to the most successful venture capitalists in Palo Alto,” he wrote. “And we have done so through authentic and substantive growth.”

In an interview with CNBC’s Morgan Brennan on Monday, Karp acknowledged that there’s excess in the AI market today and that some companies are eventually going to feel the pain.

“The strong companies are going to get much stronger, and the people pretending they’re doing stuff are going to disappear very quickly,” Karp said.

WATCH: D.A. Davidson’s Luria on Palantir

Ether fell as much as 9% on Monday, slipping below its critical $3,600 support level, shortly after a multimillion dollar hack affected a protocol on the token’s native network. 

The cryptocurrency, which is issued on Ethereum, was last down 6.6% at around $3,600, CoinMetrics data shows. That’s roughly 25% off its high of $4,885 hit on August 22. 

The coin’s tumble came after Ethereum-based decentralized finance protocol Balancer on Monday lost possibly more than $100 million in a hack. The exploit marks the latest in a series of bearish events that have put digital assets investors on tenterhooks over the past few weeks.

In mid-October, U.S. President Donald Trump announced “massive” tariffs on China over its restriction of rare earth exports, kicking off investors’ flight from crypto to risk-off assets such as gold. And although the president later walked back that threat, his comments sparked a sell-off that triggered cascading liquidations of highly leveraged digital asset positions. 

Last week, Federal Reserve Chair Jerome Powell cautioned investors about expecting future rate cuts, adding to existing bearish market sentiment.     

“These events have put investors on uneasy footing as we roll into November,” Juan Leon, senior investment strategist at Bitwise, told CNBC. “Macro volatility notwithstanding, this October’s drawdown appears to have been a healthy, albeit sharp, de-leveraging event that flushed speculative excess from the market.”

Some stocks linked to digital assets are also coming under pressure. Coinbase shares were down nearly 4%, while Bitcoin treasury firm Strategy edged down more than 1%.