Shares in Palantir Technologies tumbled Friday amid a broad retreat in technology stocks, although a Wall Street analyst in a report pointed to positive developments involving a U.S. Army contract. Palantir stock once again fell below its 50-day moving average, a key technical level.
On the stock market today, Palantir stock tumbled more than 5% to 85.26 in afternoon action, retreating below its 50-day line. The Nasdaq composite fell 2.7%.
In 2025, Palantir stock has gained over 11%. PLTR stock recently clawed back a bit. However, shares are down over 30% from an all-time high of 125.41 on Feb. 19.
Palantir Stock: U.S. Army Contract
One concern for Palantir stock has been possible Department of Defense budget cuts and exposure to U.S. Army contracts.
In a report on Friday, William Blair analyst Louie DiPalma pointed to positive news.
"The U.S. Army announced that it is changing course and putting the Army Data Platform 2.0 program development on indefinite hold," he said in a report. "In early 2023, the U.S. Army began the process to develop a successor to the Army's Vantage data platform that is powered by Palantir. The successor program was called Army Data Platform 2.0. The Army is now leaning toward sticking with Vantage, which is one of Palantir's largest overall contracts, generating approximately $115 million in annual recurring revenue."
DiPalma added: "This week's shift to suspend ADP 2.0 is positive for Palantir and suggests Palantir will serve as the exclusive long-term prime contractor."
Goldman Sachs Analyst Keeps Neutral Rating
Meanwhile, Goldman Sachs analyst Gabriela Borges on Thursday published a deep dive on Palantir's data analytics software technology. However, Borges maintained her neutral rating on Palantir stock.
"Palantir is down 30% from its peak," said Borges in a report. "This correction has likely been driven by concerns that some of the (Trump) administration's policies may be disruptive in the near term even if is ultimately a tailwind for Palantir's government business in the long term and a correction in stocks with exposure to AI adoption."
She added: "At Palantir's current valuation, we struggle to consider bull case scenarios that justify (its trading multiple). Coupled with the stock's volatility independent of fundamental data points and outsized ownership from retail shareholders, we maintain a neutral rating."
Meanwhile, the iShares Expanded Tech-Software ETF — composed of many of the major enterprise software players — is down 10% in 2025.
Further, institutional ownership of PLTR stock has weakened.
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.
AI Stocks Struggling
Palantir is among artificial intelligence stocks to watch. Many of last year's hot AI stocks have struggled, including chipmaker Nvidia, Arista Networks and Salesforce.
In 2024, Palantir stock popped 340%, with much of the gain coming after Donald Trump's Presidential election win.
While the outlook for Palantir stock may depend in part on general investor sentiment amid Trump tariffs and growing worries over a U.S. economic recession, the bigger issue has been spending on artificial intelligence.
Further, China startup DeepSeek has roiled AI stocks.
DeepSeek came out of nowhere to release a powerful AI training model developed with much less computing power.
One view is that the commoditization of AI models could spur application development. In that case, software companies like Palantir could emerge as the best AI stocks if they can monetize new products and services.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
