There's plenty for bulls and bears to hash out over Palantir Technologies. Bulls point to improved profitability for PLTR stock. Bears focus on sustained revenue growth for Palantir stock. Then, there's buzz over artificial intelligence stocks to consider for the maker of data analytics software.
Palantir has provided data analytics tools to government customers for intelligence gathering, counterterrorism and military purposes. Now Palantir aims to use generative AI to spur growth in the U.S. commercial market, such as health care and financial services.
Federal Budget Cuts
Amid stock market volatility, Palantir stock has gained 28% in 2025. Palantir stock hit its all-time intraday high of 125.41 on Feb. 19 and closed at 112.06 that day. At one point in March, shares had retreated 40% from that high.
But PLTR stock has retaken its 50-day moving average, a key technical level. And, Palantir stock is back on the IBD Leaderboard. Further, Palantir is among AI stocks to watch.
One concern for Palantir stock has been possible Department of Defense budget cuts and exposure to U.S. Army contracts. Shares in IT government contractors recently tumbled after Secretary of Defense Pete Hegseth canceled some DOD contracts. Another issue is insider selling by Chief Executive Alex Karp and others.
Meanwhile, Palantir has filed its annual report. Here's a link to SEC filing.
Also, Palantir stock jumped on its fourth quarter earnings report and 2025 revenue outlook as Karp declared: "A software juggernaut has indeed emerged."
In Q4, US. commercial revenue grew 64% year-over-year to $214 million. U.S. government revenue grew 45% to $343 million.
For 2025, Wall Street currently projects EPS of 53 cents, up 29%, with revenue growing 31% to $3.754 billion.
Trump Administration 2.0
Further, Palantir stock advanced 340% in 2024, with much of the gain coming after Donald Trump's Presidential election win.
Several members of the incoming Trump administration have ties to Palantir, a company co-founded by longtime venture capitalist Peter Thiel. They include David Sacks, tapped as White House artificial intelligence and crypto czar. Tech industry maverick Elon Musk, Sacks and Thiel helped launch PayPal, becoming part of the so-called PayPal Mafia. Musk is a key Trump advisor.
According to a Financial Times report, Palantir is getting a life from a "revolving door" of executives and officials passing between the company and high level government positions in the U.S. and U.K.
One reason for Palantir's post-election rally could be views that artificial intelligence will play a bigger role in homeland security or defense spending.
Palantir Stock: Defense Business News
In December, the federal government gave Palantir a higher rating for secure cloud computing services. And, Palantir announced a partnership with Booz Allen Hamilton, a competitor in some government and defense services.
In October, Palantir formed an alliance with defense firm L3Harris.
The company continues to make progress with its "Artificial Intelligence Platform," initially rolled out in early 2023. On March 13, Palantir hosted its sixth artificial intelligence conference for customers, with several new companies taking part.
However, Palantir has not disclosed pricing for AI products. Some analysts say Palantir needs to show more revenue progress with generative AI commercial deployments.
Still, Wall Street analysts now do not expect most software makers to monetize generative AI, or "conversational AI," in a material way until late 2025 or 2026.
Palantir recently announced an artificial intelligence deal with Elon Musk's xAI, which has built an AI training models called Grok. Databricks also is a new partner.
In November, Palantir and startup Anthropic announced a partnership with Amazon Web Services to provide U.S. intelligence and defense agencies access to Claude 3 AI models.
According to a report, Palantir and startup Anduril Industries are talking with many other tech companies, including OpenAI and Elon Musk's SpaceX, to form a consortium to jointly bid on U.S. government contracts.
Palantir is in talks to invest in drone and software maker Shield AI in its next funding round, according to the Information.
PLTR Stock Fundamentals
On the news front, there's plenty for investors to mull. Oracle and Palantir announced a cloud computing alliance.
The Denver-based company offers three platforms. One is Palantir Gotham, used primarily by government agencies. There's Palantir Metropolis for banks, financial services firms and hedge funds. And Palantir Foundry is used by corporate clients.
Palantir gets nearly 60% of its revenue from government agencies. Decelerating revenue growth is an issue. In 2022, revenue growth slowed to 24% from 40% in 2021 and 47% in 2020. In 2023, revenue grew 17% year-over-year to $2.23 billion.
Palantir Stock Technical Analysis
Meanwhile, IBD doesn't put much weight on P/E ratios and other valuation metrics. On the other hand, here are some time-tested trading rules.
Meanwhile, Palantir's Relative Strength Rating stands at 99 out of a best-possible 99.
Also, Palantir stock holds a Composite Rating of 98 out of a best-possible 99, according to IBD Stock Check-up. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
PLTR stock holds an Accumulation/Distribution Rating of D-plus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
Also, as of March 25, needs to form a base to be actionable, according to MarketSurge. Volatility remains an issue amid a possible stock market correction.
Investors can sign up for news alerts from Palantir investor relations department here.
Further, check out IBD Stock Lists and other IBD content to find dozens more of the best stocks to buy or watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
