2026's Palantir Stock Debate: Defense Play Or AI Enterpri...

Technology

2026's Palantir Stock Debate: Defense Play Or AI Enterprise Growth Machine?

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REINHARDT KRAUSE
07:59 AM ET 12/01/2025

There's plenty for bulls and bears to hash out over Palantir Technologies (PLTR), a maker of data analytics software, amid the company's premium valuation. While Palantir stock swooned in November along with some other artificial intelligence plays, like Oracle (ORCL), shares are still up 122% in 2025.

Even with fast-growing commercial revenue, some investors think of Palantir as a defense stock, owing to its roots in government contract work and new opportunity in mission-critical AI defense systems. For Palantir stock to shine in 2026, the company probably needs to garner more large government and defense contracts.

That said, Palantir's valuation stock is largely tied to it being an "AI-first" software company with fast-growing enterprise market sales.

What's clear is that the trade in artificial stocks has lost some momentum. In the words of economist Ed Yardeni, "while the AI bubble isn't bursting, it is losing some air."

Some technical ratings for Palantir stock have weakened. PLTR stock has retreated 19% from its record high of 207.52 set on Nov. 3. Many artificial intelligence stocks have pulled back from 52-week highs. Aside from the valuation of Palantir stock, bears have pointed to insider selling.

Meanwhile, Palantir reported third quarter earnings and revenue that topped Wall Street targets, boosted by U.S. government and commercial growth. In Q3, Palantir earnings were 21 cents on an adjusted basis, doubling from a year earlier. Revenue climbed 63% to $1.18 billion, the software maker said. Analysts expected Palantir to report Q3 adjusted profit of 17 cents per share and revenue of $1.09 billion.

Palantir Stock: Outspoken CEO

Here's what investors need to know about the data analytics software maker and its chief executive, Alex Karp.

Palantir's roots are in predictive-based artificial intelligence, mainly using pattern recognition tools. It's now upgrading products to generative AI, which relies on advanced reasoning models and provides novel outputs based on conversational user prompts.

Since its founding, Palantir has provided data analytics tools to government customers for intelligence gathering, surveillance, 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.

Generally, Palantir stock has gained amid views that the company seems poised to win more U.S. government business during the Trump administration.

Palantir recently hosted its eighth artificial conference for customers. Further, Palantir initially rolled out its "Artificial Intelligence Platform" in early 2023. AIPCon is the company's flagship marketing event showcasing real-world AI use cases.

Here's a look at Palantir's go-to-market strategy in artificial intelligence.

The IBD Methodology: How To Invest In Stocks While Managing Risks

Several members of the Trump administration have ties to Palantir, a company co-founded by longtime venture capitalist Peter Thiel. They include David Sacks, tapped as White House artificial intelligence and crypto czar.

Meanwhile, Palantir seems well-positioned for the Trump administration's plans for a "Golden Dome" air and missile defense shield that can protect the U.S. from long-range strikes. But it faces Golden Dome competition from Lockheed Martin (LMT).

Palantir Stock Technical Ratings

Further, Palantir stock advanced 340% in 2024, with much of the gain coming after Donald Trump's Presidential election win.

Institutional ownership has weakened. PLTR stock holds an Accumulation/Distribution Rating of C. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.

Also, Palantir stock holds a Composite Rating of 98 out of a best-possible 99, according to IBD Stock Check-up. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better. Another technical rating has faltered. PLTR stock has a 21-day ATR of 5.80%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs. IBD suggests stocks with ATRs of up to 8%. Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity, quantum computing and cloud computing.

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