Palantir Technologies Inc. (NYSE:PLTR) has emerged as a pivotal player in government technology and artificial intelligence, with its influence expanding from immigration enforcement to potential Pentagon leadership.
What Happened: The company’s Chief Technology Officer, Shyam Sankar, is being considered for the Pentagon’s top research and engineering position, Politico reported on Wednesday, citing two sources close to the transition team. Sankar has advocated for reforming the Pentagon’s acquisition system and criticized the defense industry’s consolidation.
Palantir’s market value recently reached $159 billion, surpassing traditional defense contractor Lockheed Martin Corp. (NYSE:LMT), marking a significant shift in the defense sector landscape.
The company’s stock surged after receiving FedRAMP High Authorization for its Federal Cloud Service, expanding its government agency capabilities.
Nicholas Wealth Management founder David Nicholas noted on X that Palantir’s multimillion-dollar contract with Immigration and Customs Enforcement positions it to benefit from increased border security spending.
Palantir is poised to benefit from President-elect Donald Trump‘s border security initiatives, according to Nicholas. He wrote, “This is a win for the stock as billions of dollars will be spent to end the border crisis.”
Why It Matters: The company’s involvement in immigration enforcement has drawn criticism. According to The Guardian’s opinion piece in 2020, Palantir’s software was instrumental in ICE operations, including workplace raids that led to mass arrests. In 2017, the company’s technology was used to map family relations of unaccompanied migrant children, contributing to controversial border policies.
The company maintains these government partnerships despite protests from workers and civil rights organizations, with CEO Alex Karp stating in a company filing, “We stand by [government clients] when it is convenient, and when it is not.”
Wedbush Securities Managing Director Dan Ives identifies Palantir as a frontrunner in enterprise AI transformation, calling it “the biggest tech trend in the last 40 to 50 years.” According to a Wall Street Journal report, however, Palantir’s government revenue growth slowed to 10% in 2023 from over 20% in 2022.
Price Action: Palantir stock closed at $69.85 on Wednesday, down 1.56% for the day. In after-hours trading, the stock edged lower by 0.21%. Year to date, Palantir’s stock has surged 321.29%.
According to data from Benzinga Pro, Palantir has a consensus price target of $30.22, with a high of $75 and a low of $7.50. Recent ratings average $63.67, implying an 8.66% downside.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
