Palantir Faces Pressure Amid Trade War and Government Cuts

Palantir Technologies (PLTR) has experienced heavy selling pressure in 2025 due to fears surrounding tariffs and potential trade war impacts. With 40% of its revenue from U.S. government sources, investors have reasons to be cautious, especially with proposed government efficiency initiatives.

Date: 17-03-2025

AI Rating: 6

Earnings Insights
The report highlights Palantir's strong government revenue, which grew by an astounding 45% year over year in the fourth quarter, reaching $343 million out of a total $828 million in revenue. This demonstrates robust demand for its AI software within government entities, which remains its largest client. With a 30% profit margin, these figures suggest solid profitability.

Revenue Growth
The company has showcased impressive growth metrics, maintaining a 36% revenue increase in the fourth quarter. Although Wall Street analysts predict a decrease in growth rates to 32% and 26% in the next two years, Palantir's current momentum indicates a strong trajectory for revenue growth.

Valuation Concerns
Despite the strong growth in revenue, the report suggests that Palantir's stock valuation remains steep, with 67 times sales and 140 times forward earnings. This presents a dilemma for investors seeking growth without an unreasonable price tag.

Overall, while Palantir's robust government revenue suggests a strong position, investor concern regarding potential reductions in government spending and high valuations by the market could make investors cautious. The ongoing focus on reducing wasteful spending through initiatives like DOGE could further complicate future growth prospects.

Stocks: PLTR