It was Nov. 2, 2023, and Alex Karp had some big news.
“We earned the most significant profit in our company’s 20-year history,” the co-founder and CEO of Palantir Technologies (PLTR) said in his letter to shareholders.
“With these results, our company is now eligible for inclusion in the S&P 500, a milestone that we have been working towards and knew was within reach,” Karp said.
One month later, Stephen Guilfoyle had some news of his own to share.
The veteran trader had named Palantir as his top stock pick for 2024, rather than tech icons Alphabet (GOOGL) and Microsoft (MSFT) .
But he didn’t stop there.
Alex Karp, CEO of Palantir, speaks during the Hill & Valley Forum on AI Security at the U.S. Capitol Visitor Center in Washington on May 1, 2024. (Photo: Tasos Katopodis/Getty Images for Jacob Helberg)
Tasos Katopodis/Getty Images
One year later, Guilfoyle did something he’d never done before: he selected the Denver provider of big-data-analytics software as his stock pick again for 2025.
“My children and grandchildren will hold equity in PLTR,” he declared in his TheStreet Pro column.
He also named Palantir, which joined the S&P 500 last year, as his single best trade.
Trader buys Palantir after stock hit hard on worries
Palantir might sound like an odd choice at this time.
The company’s shares recently tumbled following news that Tesla TSLA CEO Elon Musk and the Department of Government Efficiency were looking to drastically reduce federal spending — including at the Department of Defense.
Roughly 50% to 60% of Palantir’s revenue comes from government contracts, with most of this business stemming from the U.S. government, particularly the Pentagon. So the company’s stock was hit hard.
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In addition, Defense Secretary Pete Hegseth reportedly directed the DoD to come up with plans to cut 8% from the defense budget in each of the next five years.
Jefferies analyst Brent Thill, who kept an underperform rating on Palantir shares. said on March 4 that Karp had sold shares valued at $45 million in the prior two weeks after selling more than $2 billion of shares in 2024.
Although Karp has sold 21% of his overall stake, his current Rule 10b5-1 trading plan allows for another roughly 17 million shares to be sold through September 2025 Thill said. The analyst thinks that the company’s earnings multiple will contract further.
On the other side, Wedbush affirmed an outperform rating and $120 price target. The investment firm said on March 4 that “the efficiency focus of the Doge initiatives could be a major coup for the likes of Palantir over the next year as its unique software value proposition plays perfectly into this broader Beltway theme under [President Donald Trump] and Musk.”
Analyst notes positive developments
On March 5 William Blair upgraded Palantir to market perform from underperform without a price target, following the 33% “Doge-driven selloff” in the shares from $125 to $84 over the past three weeks.
Palantir’s valuation is “still frothy” with potential downside risk of more than 40% due to delays on government contracts, but “there have been positive developments,” the investment firm said. GuruFocus pegs the stock’s forward price-to-earnings multiple at about 151.
Chris Versace is optimistic about Palantir as he added the company to TheStreet Pro’s bullpen.
“While much has been made about the company’s exposure to the federal government, its software is used across 90 industries and the larger global government sector accounted for 55% of revenue last year,” he told readers. “The balance was from the commercial sector.”
While those percentages matched the ones for 2023, he added, “Palantir’s customer count jumped to 711 exiting 2024 from 497 at the end of 2023, nearly double compared to the end of 2023.”
Related: Analyst who forecast Palantir rally updates stock price target
Versace said he’s seeing signs of greater pushback on Doge’s “freewheeling cost-cutting efforts,” with U.S. Senate Republicans pushing for Congress to codify spending cuts.
He also said that the Supreme Court’s recent decision not to let Trump withhold certain payments to foreign aid organizations doesn’t bode well for the White House’s hopes of cutting spending allocated by Congress.
Versace said the government has waste to cut and inefficiencies to be rooted out, “but congressional approval over proposed Doge cuts means public voting records, and that increases the odds of smaller Doge cuts than previously stated.”
Guilfoyle said in a TheStreet Pro post that he’d used the recent weakness as an opportunity to buy more Palantir shares on March 6 and said he might add more depending “on how Thursday’s trading session [evolved.”]
“You all know that PLTR is my largest long position,” Guilfoyle said.
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