Palantir Technologies Inc. (NASDAQ: PLTR) has experienced significant volatility in recent weeks, with its stock price rattled by fears of a recession driven by new tariffs and ongoing concerns about federal spending cuts. As a result, PLTR shares have plummeted more than 35% from their year-to-date high reached in mid-February. However, amid this turbulence, some analysts are recommending a buy, citing the company’s potential for substantial upside in the near term.
William Blair analyst Louie DiPalma has recently expressed optimism about Palantir, suggesting that the current weakness in its stock presents a buying opportunity. DiPalma’s bullish stance is rooted in several key developments that could serve as tailwinds for the company. Notably, the Trump administration has directed the Pentagon to reallocate approximately $50 billion toward advanced military technologies, including drones. This shift could benefit Palantir, as its software is integral to powering these military innovations.
In addition to the Pentagon’s funding initiatives, DiPalma points to the U.S. Army’s potential announcement of a new contract for its Next-Generation Command and Control (NGC2) program as another positive indicator for Palantir. The Army has also indicated plans to continue utilizing the existing Army Vantage platform, which is powered by Palantir’s technology. These developments suggest that the company’s share price could see a significant rebound in the coming weeks, according to DiPalma’s analysis.
Another factor contributing to DiPalma’s recommendation is Palantir’s minimal revenue exposure to China. As Beijing has implemented a 34% retaliatory tariff on American products, many U.S. tech companies are feeling the pinch. However, Palantir has historically avoided doing business with China due to concerns over data privacy and security. More than half of the company’s revenue is generated from U.S. government contracts, which positions it favorably in the current geopolitical climate. This focus on domestic contracts has allowed Palantir to provide better-than-expected guidance, projecting revenue of $3.75 billion for the year, surpassing analysts’ forecasts of $3.52 billion.
Despite the macroeconomic challenges and uncertainties that loom over the tech sector, Wall Street remains cautiously positive about Palantir’s prospects. The mean target for PLTR shares currently hovers around $84, indicating a potential upside of approximately 10% from current levels. While this target does not suggest an immediate return to the stock’s peak in mid-February, it reflects a belief in the company’s long-term growth potential.
Investors are advised to keep a close eye on Palantir as it navigates these turbulent waters. The combination of increased military spending, potential new contracts, and a strong domestic revenue base could position the company for a robust recovery. As the market continues to react to tariff-related fears and economic uncertainties, Palantir’s strategic focus on government contracts and advanced technologies may provide a buffer against broader market volatility.
In conclusion, while Palantir Technologies faces challenges in the current economic landscape, analysts like Louie DiPalma see significant opportunities for growth. With a strong foundation in military technology and minimal exposure to international tariffs, Palantir could emerge as a resilient player in the tech sector. Investors looking for potential upside may find Palantir an attractive option as it works to capitalize on upcoming opportunities in the defense sector.
