Can AI Defense Contracts Push Palantir Shares Higher?

Core Viewpoint - Palantir Technologies Inc. continues to perform well financially, demonstrating significant growth in its government contracts and a promising outlook for its commercial business, despite some skepticism from critics [1][2]. Government Contracts - Palantir's government business has seen a 53% year-over-year growth, significantly outperforming competitors like BigBear.ai, which reported a decline in revenue due to contract disruptions [5][6]. - The recent passage of the One Big Beautiful Bill will increase the Department of Defense budget to over $900 billion, with $150 billion allocated for disruptive defense technologies, benefiting Palantir [6][7]. - The U.S. Army awarded Palantir a $10 billion contract by consolidating 75 contracts, which may enhance the company's bottom-line growth over the contract's duration [8]. Commercial Growth - Palantir's commercial revenue accounted for 44% of total revenue in August, with a faster growth rate compared to its government business [10][11]. - There is potential for Palantir to generate more revenue from its commercial side than from government contracts by the end of the decade [10]. Stock Performance and Forecast - The current stock price is $157.75, with a 12-month price target of $136.61, indicating a potential downside of 13.40% [10]. - Analysts have set a bullish price target of $200, although the stock has faced volatility, including a 40% drop in early 2025 [12][15]. - Short-term support levels for the stock are identified at $168–169, $160–162, and $150–152, indicating potential buying opportunities [17].