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Palantir Technologies (PLTR) has been under pressure lately, with shares slipping as concerns mount over potential cuts to U.S. defense spending. The stock plummeted more than 40% from its all-time high reached on Feb. 19 following news that Defense Secretary Pete Hegseth intends to cut projected U.S. military spending by 8% over the next five years. Notably, over 40% of Palantir’s 2024 revenue came from U.S. government contracts, according to data compiled by Bloomberg, and that segment grew more than 40% in each of the past two quarters. With that, potential budget cuts from the Department of Defense could threaten a critical revenue source for the company.
However, a noteworthy cluster of political figures – Marjorie Taylor Greene, Gilbert Cisneros, James Comer, and Julie Johnson – made headlines for their financial disclosures, revealing recent purchases of PLTR stock. Their buys suggest confidence in the company’s long-term prospects, even amid current volatility.
In this article, we will take an in-depth look at the company’s fundamentals and assess whether now is the right time to follow the lead of the mentioned politicians and buy PLTR stock.
About Palantir Technologies Stock
Palantir Technologies (PLTR) develops and deploys software platforms for the intelligence community, commercial enterprises, and government entities around the globe. It offers a range of platforms, such as Palantir Gotham, Foundry, Apollo, and the Artificial Intelligence Platform. It currently has a market cap of about $203.5 billion.
Palantir’s key platforms include Gotham, designed for detecting patterns in large datasets for defense and intelligence agencies, and Foundry, which functions as a central operating system for data across multiple industries. Apollo is the company’s cloud-agnostic platform that enables seamless software updates, while the Artificial Intelligence Platform (AIP) leverages generative AI models to improve decision-making across commercial and government sectors.
Despite the recent pullback, shares of the analytics software provider have still risen 18.1% year-to-date.
4 Politicians Recently Bought Palantir Stock
Just before reports surfaced about potential budget cuts from the Department of Defense, four members of Congress disclosed their purchases of PLTR stock. Notably, according to the Stop Trading on Congressional Knowledge Act of 2012, also known as the STOCK Act, U.S. Congress members must file disclosures for any stock transactions valued over $1,000 within 45 days of the transaction date. This law aims to curb insider trading by ensuring that politicians do not use privileged information for personal financial gain in the stock market.
The first politician on our list who recently purchased PLTR stock is Rep. Marjorie Taylor Greene, who has represented Georgia’s 14th congressional district in the House of Representatives. The Congresswoman bought shares in Palantir on Feb. 12, with the purchase value reported between $1,001 and $15,000. Greene also recently disclosed the purchase of Nvidia stock.
The next politician who recently bought PLTR stock is Gilbert Ray Cisneros, Jr., the representative for California’s 31st congressional district. In a filing disclosed on Feb. 11, the Representative reported purchasing between $1,001 and $15,000 worth of PLTR stock on Jan. 24. Also, James Comer, the congressional representative from Kentucky’s 1st district, purchased between $1,001 and $15,000 worth of PLTR stock on Jan. 21, as revealed in a filing on February 11.
Finally, newly elected Julie Johnson, who represents Texas’s 32nd congressional district, also purchased up to $15,000 in PLTR stock on Jan. 15. The transaction was disclosed in a filing on Feb. 12.
Wedbush Bullish on PLTR Despite Potential DOD Budget Cuts
Wedbush Securities contended that if the Department of Defense implements the budget cuts outlined in Defense Secretary Pete Hegseth’s leaked memo, it would actually present Palantir Technologies with “more opportunity” rather than less.
“...we believe these DOD cuts will play out, as in our view, Palantir’s unique software approach will enable the company to gain more IT budget dollars at the Pentagon....not less, despite these initial knee-jerk reactions from the Street,” Wedbush analysts led by Dan Ives wrote in a note to clients. “Palantir is so well positioned for this new disciplined spending environment at the Pentagon, and this will ultimately be a positive growth catalyst as the various programs are scrutinized and as Karp & Co. get a bigger seat at the table in the Beltway.”
Moreover, Wedbush analysts stated that the “stepped-up” investments in AI from President Donald Trump’s administration, specifically Project Stargate, should favor Palantir. Palantir is in the “sweet spot” to capitalize on federal government AI-related spending, including securing FedRAMP approval for its entire cloud services, according to the analysts. “Palantir remains one of our top names to own in 2025, and we believe this sell-off represents another opportunity...,” the analysts said.
PLTR Skyrockets After Blowout Q4 Results
On Feb. 4, Palantir stock soared about 24% after the company reported exceptional Q4 results, exceeding even the most optimistic expectations.
The company’s revenue grew 36% year-over-year and 14% sequentially to $828 million, beating both the high end of its own guidance and Wall Street’s consensus. Both the government and commercial segments posted strong year-over-year growth, with revenues rising 40% and 31%, respectively. Notably, Palantir’s total revenue growth has been accelerating over the past six quarters, driven by the rapid expansion of its U.S. commercial business. Its adjusted EPS came in at $0.14, beating expectations by $0.03.
U.S. commercial growth was exceptionally strong. U.S. commercial revenue surged 64% year-over-year and 20% quarter-over-quarter, reaching $214 million in Q4, clearly demonstrating the growing traction of the company’s AI offerings, particularly AIP. During the earnings call, management highlighted that AIP continues to draw new customers, with the company now having nearly five times the number of U.S. commercial customers compared to three years ago. Management also conveyed strong confidence in future growth fueled by AIP solutions. In Q4, the company secured 129 deals valued at $1 million or more. It also closed 32 deals exceeding $10 million, marking a record-setting quarter.
Meanwhile, the company is setting new deals with customers at a record pace. Its total contract value (TCV) was $1.79 billion in Q4, up 56% year-over-year. This was fueled by a combination of factors, including share of wallet gains from both new and existing customers.
Palantir ended the quarter with $5.2 billion in cash, cash equivalents, and U.S. Treasury securities, and without any debt, highlighting its very strong financial position.
Finally, the company issued strong guidance for 2025, forecasting revenues of up to $3.757 billion. That represents just over 30% year-over-year growth, indicating that management's guidance suggests a continued acceleration in PLTR’s growth. The company also projects an adjusted income from operations of up to $1.567 billion.
PLTR Valuation and Analysts’ Estimates
According to Wall Street estimates, PLTR is expected to post a 35.85% year-over-year adjusted EPS growth to $0.56 in FY25. Furthermore, analysts project a 32.16% year-over-year increase in the company’s top line to $3.79 billion.
Valuation has long been a major point of concern for PLTR stock. Despite a recent pullback, the company remains quite expensive across all metrics. For example, the stock’s forward P/E (Non-GAAP) multiple stands at 160x, well above the sector median of 23.54x and even its five-year average of 124x. This trend is consistent across all other key valuation multiples, where it trades at the same or an even greater premium compared to the sector median. With that, despite Palantir’s impressive growth story, its current extreme valuation is difficult to justify.
Options Market Sentiment on Palantir Stock
Looking at the March 21, 2025 option chain, the $90.00 CALL option shows a bid/ask spread of $6.00/$6.40, while the $90.00 PUT option features a spread of $6.05/$6.95. Keep in mind that this option strike is closest to the current stock price. We can now determine the expected price movement by using the midpoint prices of these options:
6.50 (90.00 put) + 6.20 (90.00 call) = 12.7/89.31 = 14.2%
Using the long straddle strategy and based on current prices, the options market indicates that PLTR stock could fluctuate approximately 14% in either direction by the March options expiration from the $90.00 strike price. That would place the stock in a trading range of $76.6 to $102.
Notably, at the $90 strike price, put options outnumber call options by a ratio of about 1.7 to 1, with 13,670 open puts compared to 8,190 open calls. This difference indicates that options market traders are cautiously positioning for a possible further decline in PLTR stock.
What Do Analysts Expect for PLTR Stock?
Wall Street analysts have assigned Palantir stock a consensus “Hold” rating, which comes as no surprise given its stellar performance in 2024 and sky-high valuation. However, it’s worth noting that since defense budget concerns arose on Feb. 19, no analyst has downgraded PLTR stock. Alternatively, on Feb. 19, Loop Capital analyst Mark Schappel began covering the stock with a “Buy” rating and set a price target of $141. The company is positioned to benefit from the AI and GenAI trends permeating the tech sector, which represent “enormous market opportunities,” according to the analyst.
Among the 19 analysts covering the stock, three rate it as a “Strong Buy,” 10 recommend a “Hold,” one suggests a “Moderate Sell,” and five assign a “Strong Sell” rating. After a recent pullback, the stock is trading slightly above its average price target of $85.11 and has 57.9% upside potential relative to the highest price target of $141 set by analysts.
The Bottom Line on PLTR Stock
Putting it all together, Palantir is an exceptional company with a seemingly unstoppable growth trajectory. However, I believe that investors should not follow the recent actions of four politicians and buy PLTR stock. In one of my latest articles about PLTR, I advised investors to wait for a pullback before buying. Although the pullback has occurred, the risks have also increased, leading me to reiterate a “Hold” rating. Sentiment in the options market also supports my cautious outlook.
