Palantir Becomes Trump Trade’s Big Winner

If we had to guess, this year has been pretty rough for your investment portfolio. Unless you were way, way, way overweight on one of Uncle Sam’s new favorite companies.

So far this year, artificial intelligence-powered data analytics firm Palantir has proven the best of the so-called “Trump Trade” companies. Its share price has soared some 77% year-to-date, on the backs of key federal government contracts, to hit a record valuation on Monday of around $314 billion. So, just how high can Palantir fly?

Move Aside, Musk

Following the November election, Wall Street traders poured into a basket of Trump Trade companies — a.k.a. those that seemed likely to benefit from new White House policies (and, to put it frankly, personal and personnel connections). Those include Trump Media, bitcoin and crypto-related stocks; Tesla, of course; and Palantir — co-founded by Peter Thiel, a prominent Trump backer and former employer-slash-mentor of the vice president.

While political ties (among other problems) ultimately dragged Tesla through the mud, Palantir has continued its ascent; its share price has climbed roughly 675% since the start of 2024. That’s because the tech firm — which specializes in using AI to sort through, detect patterns in, organize, and visualize data — has become a favorite of the federal government, especially in the defense sector:

• The US government remains Palantir’s single-largest client. In its first-quarter earnings report, the company said that “US government revenue” accounted for $375 million of its total $884 million in sales; those figures mark 45% and 39% year-over-year jumps, respectively.
• Last week, The New York Times reported that one of Palantir’s signature products, a platform called Foundry, is being used in at least four government agencies, including the Department of Homeland Security and the Health and Human Services Department; the company is also in talks for a permanent contract to provide the platform to the Internal Revenue Service.

“The relationships that Palantir’s founders … have with senior members of the Trump administration are helpful for business,” D.A. Davidson analyst Gil Luria recently told Reuters.

The Sky(net) is the Limit: That’s just for starters. Two weeks ago, the Pentagon announced the addition of nearly $800 million to an already $480 million contract for Palantir’s AI-driven military targeting software, called the Maven Smart System. The company also looks poised to score contracts to help build the administration’s planned nationwide “Golden Dome” missile defense system, which some experts say could cost upwards of hundreds of billions of dollars. In March, the White House issued an executive order to eliminate “information silos” and promote data-sharing across government departments — a process the NYT reports Palantir has been intimately involved with.