Palantir's AI-Driven Ascent: Wall Street's Bullish Outlook Amid Government Spending Shifts

Palantir Gains as Wedbush Calls It a Top Stock to Own in 2025

Palantir (PLTR) shares climbed Monday as Wedbush analysts called the stock one of its "top names to own in 2025." Shares jumped over 6% in recent trading, before paring back some early gains. The stock has added about 15% since the start of the year and nearly quadrupled in value from a year ago, despite recent losses. Shares of the Palantir lost close to one-third of their value since hitting a record high last month after the Washington Post reported the Trump administration directed Pentagon officials to trim the U.S. defense budget by 8% annually for the next five years. The report raised worries Palantir's sales could take a hit, as the federal government represents a major client for Palantir, accounting for over 40% of its revenue in the fourth quarter. However, Wedbush analysts told clients Monday that they expect Palantir's Artificial Intelligence Platform and the Trump administration's focus on efficiency could leave the company in a "sweet spot to benefit from a tidal wave of federal spending on AI," even as other government contractors face spending cuts. "We believe Palantir could actually gain more deals and IT budget dollars across various government agencies," the analysts added. Wedbush maintained an "outperform" rating and $120 price target for the stock, a nearly 40% premium to Monday's intraday level at $86.82. Several other analysts have voiced similar sentiments in recent weeks, suggesting last month that Palantir could be better positioned than most to benefit from the Elon Musk-led Department of Government Efficiency's goals to cut spending.

Palantir's Stock Surges as Wall Street Analyst Says It Could Help DOGE Cut Spending

The stock has more than tripled in value over the past year, despite a recent selloff on worries spending cuts could hurt the government contractor. Palantir (PLTR) shares surged Wednesday as William Blair analysts suggested the company could be well positioned to support efforts to trim government spending directed by the Trump administration's Department of Government Efficiency. The analysts told clients Wednesday that a recent executive order requiring federal agencies to create a centralized payment tracking system practically "seems earmarked for Palantir." They added that they expect Palantir's artificial intelligence offerings to be "platforms of choice." Shares of Palantir jumped nearly 7% to $90.13 Wednesday, leaving the stock up 19% for the year so far. They've more than tripled in value over the past 12 months, despite a recent selloff on worries that an expected pullback in spending could hurt the government contractor. William Blair analysts upgraded the stock to "market perform" from "underperform," and said it could return to $125 over the next two years "as the market reverts to risk-on mode." Just earlier this week, Wedbush analysts called Palantir one of their "top names to own in 2025" and reiterated an $120 price target. The company could be in a "sweet spot to benefit from a tidal wave of federal spending on AI," the analysts said, even as other government contractors face spending cuts. "We believe Palantir could actually gain more deals and IT budget dollars across various government agencies," Wedbush added.

Will Palantir Stock Crash in 2025? | The Motley Fool

Shares in this technology company are alarmingly expensive. How much longer will the bonanza last? With its shares up 279% over the last 12 months, Palantir Technologies (PLTR 5.53%) has benefited from two recent hype cycles: generative AI and the election of President Donald Trump. Unfortunately for investors, both of these investment theses seem to be on their last legs. Let's dig deeper to see what that could mean for the company's shares in 2025 and beyond. Since its debut on the Nasdaq through an initial public offering (IPO) in 2020, Palantir has attracted a fair share of attention. The big-data analytics company has an exciting business model, offering software as a service to clients like the Central Intelligence Agency and Department of Defense. The company even helped the U.S. government track down Osama bin Laden, putting it at the forefront of military tech. When OpenAI introduced generative AI to the mainstream, management quickly pounced on the opportunity, synergizing large language models (LLMs) with its existing data analytics tools to make them more efficient and offer real-time insights in fast-paced scenarios such as battlefields. The stock price also may have benefited from the changing political climate, which culminated in Trump's election victory in 2024. Palantir's co-founder, Peter Thiel, donated to Trump's campaign and has a close relationship with Vice President JD Vance, who used to work for Thiel's global investment fund, Mithril Capital. But while these political relationships are interesting, it's hard to see how they will directly translate to sustainable shareholder value. Many of the Trump administration's policies could put Palantir on the back foot. The best example might be the war in Ukraine, where the company helps the Ukrainian armed forces target Russian troops. The Trump administration has expressed a desire to end this war as soon as possible, which could reduce the market for Palantir's services. Palantir could also face further challenges in the United States, where it earns the lion's share of its revenue (around 67%). Under Defense Secretary Pete Hegseth, the Pentagon has pledged to cut 8% of its budget annually for the next five years (a reduction of $50 billion per year). And this could limit the company's ability to earn contracts. The company's future business looks uncertain, but its current operations also leave much to be desired. Fourth-quarter revenue grew 36% year over year to $827.5 million, which is significantly lower than others in the AI industry like Nvidia, which grew sales 78% in its fiscal fourth quarter. Many see Palantir as an AI company, but that narrative seems overblown. The company has incorporated generative AI tools into its software. However, operational performance is more in line with data analytics peers like Snowflake, which grew 28% according to its most recent earnings report. Snowflake has also incorporated AI into its business, which means Palantir isn't the only game in town regarding this niche. The bottom line is where the alarm bells really start ringing. Adjusted earnings before interest, taxes, depreciation, and amortization are $379.5 million, but this adds back a stunning $281.8 million in stock-based compensation. Although stock-based compensation allows Palantir to save cash, this outflow looks excessive and could dilute investors' claims on future earnings. Palantir looks like just another data analytics company with no clear edge to justify its massive rally. Granted, its focus on military and government clients gives it some differentiation from the competition. But this might turn into a liability as the Trump administration pursues a policy of demilitarization and lower government spending. With a forward price-to-earnings (P/E) multiple of 156, Palantir's valuation doesn't account for its many challenges, and this leaves room for a substantial downside in 2025. Investors who want to bet on AI should look for more reasonably priced options.

1 Artificial Intelligence (AI) Stock to Buy Hand Over Fist Before It Surges by 60%, According to 1 Wall Street Analyst | The Motley Fool

In 2024, data analytics firm Palantir Technologies (PLTR 0.18%) was one of the top performers in the S&P 500 (SNPINDEX: ^GSPC), with its shares gaining more than 340%. After such a meteoric rise, you might think that Wall Street analysts would advise shareholders to trim their positions and lock in some gains. However, veteran analysts Dan Ives of Wedbush Securities and Mariana Perez Mora of Bank of America remain two of the strongest Palantir bulls on Wall Street. Moreover, the company just received perhaps its most optimistic call yet from Loop Capital Markets. Rob Sanderson is an equity research analyst at Loop Capital Markets. In late February, he initiated coverage on Palantir stock with a buy rating. And while plenty of analysts view Palantir stock as a buy, Sanderson set himself apart from the pack with an aggressive 12-month price target of $141 per share, implying roughly 60% upside from current trading levels. As of this writing, Loop's price target is the highest on Wall Street among analysts covering Palantir. One of the most obvious concerns investors may have about putting money into Palantir is its valuation. Sure, the stock rose by 340% last year -- but what does that really mean? As illustrated in the chart above, Palantir's valuation metrics are pretty hard to make sense of. While growth stocks, particularly in the software space, tend to carry premium valuations, the price-to-sales (P/S) and price-to-earnings (P/E) ratios above are abnormally rich. In essence, Palantir experienced such high degrees of valuation expansion over the last year that traditional benchmarks just aren't that useful when assessing an investment in it. In Sanderson's research note, he compares Palantir to companies such as Adobe and Salesforce. While neither of them competes with Palantir directly, I see both software giants as decent comparable businesses. My rationale is that Adobe and Salesforce dominate their respective core markets -- namely, web design and customer relationship management. While plenty of competition exists in both of these spaces, Adobe and Salesforce have built such integrated, sticky ecosystems that each is like a pseudo-monopoly. Palantir has a long way to go before it reaches the scale of Adobe or Salesforce (despite the closeness of their respective valuations). For this reason, to buy Palantir stock right now requires an investor to at some level buy into the long-term narrative that the company will one day become a software giant. And valuing narratives accurately is an impossibly tall order. I don't have a crystal ball that can tell me whether or not Palantir will reach Sanderson's price target of $141 per share a year from now. Nevertheless, I'm not so concerned about the specifics surrounding its upside potential. As an investor in Palantir myself, my primary focus is learning about the company's growth roadmap. Last year, it grew its total customer base by 43% and increased its private sector clients by 52%. If Palantir keeps up its current paces of customer acquisition, revenue growth, and profit acceleration, it could emerge as the de facto leader in AI data analytics -- in which case, the company's lofty valuation could be justifiable. In my view, Palantir's integrated suite of AI platforms is helping it create an unparalleled ecosystem -- one that is becoming more difficult for even tech's largest players to compete with. For these reasons, I consider it a compelling opportunity for long-term investors. Despite how pricey it may be by some measures, this appears to be a rare opportunity to scoop up Palantir stock as it takes what I expect to be a minor breather from what has otherwise been a prolonged upward journey.

Wedbush: "We Believe Palantir Could Be A Trillion Market Cap Over The Coming Years And Shaping Up To Be The Next Oracle Or Salesforce As The AI Revolution Plays Out"

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Wedbush analyst Dan Ives has been consistently bullish on Palantir, even through what has been nothing short of a brutal selloff. Today, the analyst is out with another bullish note on Palantir's prospects. For the benefit of those who might not be aware, Palantir is an AI-powered Software-as-a-Service (SaaS) provider that allows companies and government agencies to gather and analyze reams of data, enabling the detection of hidden patterns within complex datasets. In what is its characteristic feature, the company's software-based offerings summarize and present the analyzed data in a manner that is quite easy to understand. Palantir shares were recently left with visible bruises after the US Defense Secretary, Pete Hegseth, ordered Pentagon officials to develop a new budget that would cut defense spending by 8 percent annually. Given Palantir's outsized reliance on government contracts, this spending retrenchment emerged as a negative catalyst for the stock. Coming back, Dan Ives has now reiterated an 'Outperform' rating and a $120 stock price target for Palantir shares. While asserting that Palantir's "AIP product moat" remains unmatched, Ives declares that the company "is helping lead the AI Revolution into the use case phase." Accordingly, Ives views the ongoing weakness in the stock as a buying opportunity: "Palantir remains one of our top names to own in 2025 and we believe this recent sell-off represents another opportunity with PLTR generating unprecedented traction across both federal and commercial for its entire portfolio." In what is crème de la crème of Ives' note on the volatile stock, the analyst declares: "We believe Palantir could be a trillion market cap over the coming years and shaping up to be the next Oracle or Salesforce as the AI Revolution plays out and PLTR will further grow into its valuation." As of the time of writing, Palantir shares are up 3 percent in today's pre-market trading session. Do note that the stock is still trading at a ~30 percent discount to Wedbush's target of around $120 per share.

Current Beltway/DOGE climate will benefit Palantir: analyst By Investing.com

Investing.com -- Wedbush analysts see upside for Palantir Technologies (NASDAQ:PLTR) as the evolving spending environment in Washington, D.C., aligns with the company's strengths. The firm said it has been speaking to more of its Beltway contacts over the last few weeks to get better insight into the current massively changing spending environment in DC and how this could impact Palantir looking forward. "The efficiency focus of the DOGE initiatives could be a major coup for the likes of Palantir over the next year," Wedbush said, noting that Palantir's software solutions are well-positioned to capitalize on the changing priorities under the Trump administration. Despite concerns about potential cuts to government budgets, Wedbush believes Palantir will not only avoid reductions but could gain additional contracts. "Palantir could actually gain more deals and IT budget dollars across various government agencies and ultimately further entrench PLTR in the FY25 and FY26 federal budget cycle," the analysts said. Palantir's stock has faced pressure following the administration's announcement of an 8% annual cut to defense spending. However, Wedbush disputes the idea that this will hurt the company. "This is exactly the opposite of how we believe these DOD cuts will play out... Palantir's unique software approach will enable the company to gain MORE IT budget dollars at the Pentagon," the analysts said. They added that many of Palantir's contracts are considered high-priority and unlikely to be affected. Additionally, Wedbush highlighted that "stepped-up AI investments now being seen under the Trump Administration with Project Stargate should benefit Palantir." The firm emphasized that Palantir is at the center of a "tidal wave of federal spending on AI." Wedbush reiterated its Outperform rating on Palantir with a $120 price target, stating, "We believe Palantir could be a trillion market cap over the coming years and shaping up to be the next Oracle (NYSE:ORCL) or Salesforce (NYSE:CRM) as the AI Revolution plays out."

Wedbush Calls Palantir a Top Stock to Own in 2025

Wedbush analysts called Palantir (PLTR) one of their "top names to own in 2025." Shares of Palantir jumped over 6% in early trading Monday, before paring back gains to finish 1.8% lower. The stock has added about 10% since the start of the year and more than tripled in value from a year ago, despite recent losses. Shares of the Palantir lost one-third of their value since hitting a record high last month after the Washington Post reported the Trump administration directed Pentagon officials to trim the U.S. defense budget by 8% annually for the next five years. The report raised worries Palantir's sales could take a hit, as the federal government represents a major client for Palantir, accounting for over 40% of its revenue in the fourth quarter. However, Wedbush analysts told clients Monday that they expect Palantir's Artificial Intelligence Platform and the Trump administration's focus on efficiency could leave the company in a "sweet spot to benefit from a tidal wave of federal spending on AI," even as other government contractors face spending cuts. "We believe Palantir could actually gain more deals and IT budget dollars across various government agencies," the analysts added. Wedbush maintained an "outperform" rating and $120 price target for the stock, an over 40% premium to Monday's close at $83.42. Several other analysts have voiced similar sentiments in recent weeks, suggesting last month that Palantir could be better positioned than most to benefit from the Elon Musk-led Department of Government Efficiency's goals to cut spending.

A New Vision From Defense Secretary Hegseth Could Be a Game Changer for Palantir Stock | The Motley Fool

It's been a weird year for Palantir Technologies (PLTR -10.73%) stock so far. Two months into 2025, Palantir shares gained nearly 7%. This handily outperforms the S&P 500 and Nasdaq Composite, which lost 2% and 6%, respectively. If you were to take that data at face value then you'd think Palantir is having a good year. However, there is more than meets the eye regarding these returns. During the month of February, Palantir stock had gained as much as 51%. But guess what? Shares only ended the month roughly 3% higher compared to January. Below, I'm going to dig into what influenced a near-30% sell-off in Palantir stock over the last couple of weeks. In addition, I'll explain why I think the ongoing sell-off is an opportunity to buy the dip in one of the highest-profile growth stocks leading the artificial intelligence (AI) revolution. Palantir develops a suite of AI software platforms called Gotham, Apollo, and Foundry. The company sells its products to both the private and public sectors. However, as it stands today, more than 50% of Palantir's business comes from the government -- particularly, the U.S. military and other defense agencies. Recently, President Donald Trump made it clear that he wants to see changes at the Department of Defense -- in particular, he has his eyes on the Pentagon's budget. While the exact details are somewhat fluid, media reporting suggests that Defense Secretary Pete Hegseth has been ordered to find budget savings of 8% annually (or roughly $50 billion) over the next several years. Palantir investors were not pleased by this news, and hence, a pronounced sell-off took shape. Back in 2020, the DOD implemented a strategy called the Software Acquisition Pathway (SWP). According to publicly available documentation from the DOD, the purpose of the SWP is "to provide for the efficient and effective acquisition, development, integration, and timely delivery of secure software." According to media outlet Breaking Defense, Hegseth has proposed doubling down on the SWP strategy as the Pentagon overhauls its budget. One of the nuances to point out regarding the Pentagon's budget changes is that the 8% savings aren't necessarily all going to be outright reductions. It's been reported that one of the goals of this initiative is to identify areas within the budget that are deemed non-essential to military operations and reallocate those dollars toward defense protocols. For this reason alone, I think the sell-off in Palantir stock is overly pronounced -- as there isn't any explicit evidence that the Pentagon is looking to part ways with the company. Moreover, given Hegseth's SWP vision, I'm actually cautiously optimistic that Palantir could expand its relationship with the military during this budget overhaul process. One of the lesser-known product offerings at Palantir is a platform called FedStart. FedStart is a software-as-a-service (SaaS) tool that helps companies achieve necessary accreditation standards required to deploy software within federal environments more efficiently. From there, companies can integrate their software with Palantir's Apollo platform and get up and running across the government. In my eyes, FedStart could be a major catalyst for the SWP process -- meaning that Palantir could be in a position to witness surging demand over the next several years as the DOD refines its budget. If anything, I think Palantir's existing relationship with the military could be deemed a valuable asset -- giving the company a launchpad to expand its infrastructure across the defense sector and accelerate growth. For these reasons, I think savvy investors may want to consider buying the dip in Palantir stock right now.

Palantir Stock Sell-Off: Is Now the Time to Buy the Dip? | The Motley Fool

Artificial intelligence (AI) stocks haven't fared well over the past few weeks. Many of the most prominent AI stocks tumbled, which may lead many investors to wonder if now is a great time to scoop up some of these dominant companies. Palantir Technologies (PLTR -10.73%) hasn't escaped this rout, and its stock has fallen over 35% from its all-time high. That's a significant drop, but is the dip worth buying? Palantir has become one of the most popular AI stock picks due to its top-notch data analytics software. Originally, its software was intended for government use. It took several data inputs, processed them, and then gave those with decision-making authority the best real-time information possible. This use case eventually expanded to the commercial side, although government revenue still makes up the majority of Palantir's total revenue. One of the biggest innovations that Palantir has launched over the past few years is its AIP (Artificial Intelligence Platform). AIP allows clients to integrate AI throughout the inner workings of a business, rather than have it be used on the side. This is critical for multiple reasons. First, it allows management to control what information is fed into an AI model. This prevents information leaks, as sensitive information (be it classified government intel or trade secrets) could be uploaded into a third-party AI model, where the company has no control over what's done with the data. It's also useful because it forces employees to use AI models, which could be better decision-makers than humans. Those are just a few benefits of AIP, although the list could go on. All this adds up to the hype behind Palantir's stock, as it has brought strong growth for the company. In Q4, Palantir's revenue rose 36% year over year to $828 million. That strength is expected to continue throughout 2025, with Q1 revenue expected to be $860 million (36% growth) and 2025 revenue to be $3.75 billion (31% growth) at the midpoint. Furthermore, unlike many of its software peers, Palantir is also profitable. While profit margins took a dip in the fourth quarter, it was due to a huge spike in stock-based compensation, as management rewarded its employees for the strong year by pulling forward the vesting date of their stock options. While this may bother Wall Street, it's an admirable move and something that investors should likely ignore, as Palantir's operating margin is still trending in the right direction if this one-time expense is ignored. If you exclude the effect of the one-time stock-based compensation bill, Palantir's Q4 operating margin would have been 17% -- a record high. In Q1, Palantir's strong operating margin should return, but it's something that investors should keep an eye on. Palantir is a strong business overall, with rapid growth and strong financials. However, its stock was rather pricey before the sell-off. Has any of that changed? Valuing Palantir's stock is tricky. Using the traditional trailing price-to-earnings (P/E) ratio doesn't work because the company hasn't posted a full year of sustained earnings. The forward P/E could be used, but at 150 times forward earnings, the stock is almost too pricey to comprehend. I think the best way to value Palantir's stock is to test what assumptions are baked into the stock price, and then check to see if there's any room for investors to make profits. Let's make these assumptions: If Palantir does all three of those things over the next five years, it will produce revenue of $10.6 billion and profits of $3.19 billion. That's substantial growth from its current $2.87 billion in revenue and $462 million in profits, but it would still yield an expensive price. At that level, Palantir would be valued at 61.3 times earnings. But here's the kicker: Palantir would only achieve that valuation (which is still rather expensive) if its stock price didn't budge from today's levels over the next five years. This tells me there's no margin of safety in the stock price, and that the stock is highly overvalued. But this doesn't mean that the stock price can't continue rising, as hype can drive a stock a long way. However, financial results matter over the long term, and Palantir doesn't have the growth to justify its current price tag. As a result, I think investors should stay away from the stock, as it has a way to fall before it's even close to considering buying again.