Palantir Technologies (PLTR) Stock: Price Surges, Is The Defense Tech Giant Ready to Bounce Back?

Palantir Technologies (PLTR) Stock: Price Surges, Is The Defense Tech Giant Ready to Bounce Back?

TLDR

• Palantir stock rose 1.3% to $85.74 on Wednesday while major indexes fell
• Expected to win U.S. Army Next-Generation Command and Control contract worth up to $100M annually
• Government contracts account for $1.2B of Palantir’s $1.9B revenue in 2024
• Shares down 31% from February high of $124.62 despite being up 278% over 12 months
• Government contractor stocks jumped on reports of Elon Musk “stepping back” from his role cutting federal bureaucracy

Palantir Technologies, the data analytics firm known for its artificial intelligence tools, saw its stock climb on Wednesday despite broader market declines. The company’s shares rose 1.3% to $85.74, extending gains after snapping a five-day losing streak the previous day.

The stock movement comes as investors digest several pieces of news affecting the defense contractor. Palantir has been on a roller coaster ride in recent months.

While Palantir remains up 278% over the past 12 months, the stock has fallen 31% from its record closing high of $124.62 in mid-February. This pullback has raised questions among investors about the company’s future trajectory.

Army Contract on Horizon

A major catalyst for Wednesday’s stock movement was a William Blair analyst report indicating Palantir is poised to win a significant U.S. Army contract. The Next-Generation Command and Control (NGC2) program could eventually deliver annual recurring revenue approaching $100 million.

According to analyst Louis DiPalma, Palantir is partnering with L3Harris and Anduril for this program. The contract would make NGC2 one of Palantir’s largest deals.

“Given the size and strategic significance of this program that plans and executes battlefield missions, we believe that Palantir’s annual recurring revenue from NGC2 will approach $100 million over time,” the analysts wrote.

This would place the NGC2 contract in the “similar ZIP code as Palantir’s other Army projects for Maven and Vantage,” according to DiPalma’s report.

Government Spending Concerns

One persistent concern for Palantir has been its heavy reliance on government contracts. The company derived $1.2 billion out of its total $1.9 billion in revenue from government spending in 2024.

This dependence has made the stock sensitive to news about potential government funding cuts. Morgan Stanley analysts recently noted that Palantir was at higher risk for earnings forecast cuts than other stocks they cover.

The Pentagon has proposed trimming roughly $50 billion from the budget each year. Defense Secretary Pete Hegseth recently signed a memo directing the termination of more than $580 million in grants, contracts, and programs.

Palantir management has pushed back on these concerns. Chief Technology Officer Shyam Sankar suggested during an earnings call that the Department of Government Efficiency would bring “meritocracy and transparency” that would benefit the company.

There are other positive signs for Palantir’s government business. The Army reportedly halted development of a successor to one of Palantir’s data platforms.

“The Army is now leaning toward sticking with Vantage, which is one of Palantir’s largest overall contracts, generating about $115 million in annual recurring revenue,” William Blair analysts said.

Political Developments

Palantir stock received an additional boost on Wednesday from reports about changes in the Trump administration. Government contractor stocks, including Palantir, jumped around 11:30 a.m. ET on news that Elon Musk would be “stepping back” from his role cutting federal bureaucracy.

Shares of major government contractors had been hit in recent weeks by signs that the Trump administration would carry out deep cuts to defense spending. The apparent shift in Musk’s role was seen as potentially reducing the pressure for dramatic spending cuts.

Palantir stock saw a 3.05% increase following this news, alongside jumps in other defense contractors like Booz Allen Hamilton, Leidos, Lockheed Martin, and L3Harris Technologies.

The company’s stock had already shown strong performance in 2024, popping 340% with much of the gain coming after Donald Trump’s Presidential election win. In 2025, Palantir stock has climbed more than 14% despite recent volatility.

From a technical standpoint, Palantir stock holds a Composite Rating of 98 out of a best-possible 99, according to IBD Stock Checkup. The stock also holds an Accumulation/Distribution Rating of C, which is considered neutral.

While the company’s revenue growth and operating margin rank among the highest in the software sector, William Blair has maintained a Market Perform rating on the shares, having upgraded Palantir stock from Underperform on March 5.

Palantir continues to expand beyond its traditional government focus. The company now aims to use generative AI to spur growth in the U.S. commercial market, targeting sectors such as health care and financial services.

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