Alex Karp, chief govt officer of Palantir Applied sciences Inc., speaks through the AIPCon convention in Palo Alto, California, US, on March 13, 2025.
David Paul Morris | Bloomberg | Getty Photographs
Tech shares have struggled in 2025, as recession and commerce conflict fears sap investor urge for food for riskier belongings.
Palantir is the exception.
In opposition to a unstable market backdrop, the software program maker’s inventory has gained 45% and is the perfect performer amongst firms valued at $5 billion or extra, in line with FactSet. The closest tech names are VeriSign, up 33%, Okta, up 30%, Robinhood, up 29%, and Uber, up 29%.
President Donald Trump‘s frenzy of presidency division overhauls is partially to thank for the pop.
“When you consider macroeconomic considerations, you as an organization should be extra environment friendly, and that is the place Palantir thrives,” mentioned Financial institution of America analyst Mariana Pérez Mora.
Palantir has set itself aside within the software program world for its artificial-intelligence-enabled instruments, gaining recognition for its protection and software program contracts with key U.S. authorities companies, together with the army. Within the fourth quarter, its authorities revenues jumped 45% year-over-year to $343 million.
Firms have confronted immense volatility in 2025 as tariffs threaten to jeopardize international provide chains and halt day-to-day manufacturing operations by mountain climbing prices. These fears have introduced the broad market index down about 7% this 12 months, whereas the tech-heavy Nasdaq Composite has slumped 11%.
Tech’s megacap firms — Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla — are all down between 7% and 31% to this point this 12 months.
On the similar time, the Trump administration has clamped down on authorities spending, giving Tesla CEO Elon Musk‘s Division of Authorities Effectivity freedom to slash public sector prices. Some administration officers have touted shifting {dollars} from consulting contracts to business software program suppliers like Palantir, mentioned William Blair analyst Louie DiPalma.
“Palantir’s enterprise mannequin is extremely aligned with the priorities of the Trump administration when it comes to rising agility and being very fast to market,” he mentioned.
That is put Palantir within the league with main contractors resembling Lockheed Martin and Northrop Grumman, which have outperformed on this 12 months’s downdraft. Many firms within the house are additionally trying to accomplice with the agency and have a tendency to flock to protection throughout recessionary instances, DiPalma mentioned.
Palantir vs. the Nasdaq Composite
CEO Alex Karp has additionally been a vocal supporter of American innovation and the corporate’s central position in serving to prop up what he referred to as the “single finest tech scene on the planet” throughout an interview with CNBC earlier this 12 months. Karp additionally informed CNBC that the U.S. wants an “all-country effort” to compete in opposition to rising adversaries.
However the trip for Palantir has been removed from easy, and shares have been vulnerable to unstable swings. Shares offered off practically 14% through the week that Trump first introduced tariffs. Shares rocketed 22% in the future in February on sturdy earnings.
Its inclusion in additional passive and quant funds through the years and the rising consideration of retail merchants has added to that turbulence, DiPalma mentioned. Final 12 months, the corporate joined each the S&P and Nasdaq. Palantir trades at one of many highest price-to-earnings multiples in software program and final traded at 185 instances earnings over the following twelve months. That places a steep bar on the inventory.
“There actually is not any margin for error,” he mentioned.
