Palantir stock in red today, but analysts see strong rally ahead

Palantir stock declined on Tuesday, with investors reassessing the company’s potential role in the escalating US-Iran conflict and digesting news that co-founder Peter Thiel plans to sell a substantial stake.

Palantir shares were down around 1% in early trading, following a 5.8% gain the previous day. If losses hold, the stock will snap a four-day winning streak.

A regulatory filing submitted late Monday showed that Thiel intends to sell 2 million shares worth approximately $280 million.

Based on data compiled by LSEG, Thiel ranks among the company’s five largest shareholders.

AI expectations tempered

The pullback also reflects a recalibration of investor expectations regarding Palantir’s artificial-intelligence offerings in the context of US military operations in the Middle East.

Over the weekend, the Trump administration designated AI start-up Anthropic a “supply chain risk” and directed federal agencies to phase out its technology.

Anthropic has said it opposes AI systems being used for mass surveillance or fully autonomous weapons.

That development initially fueled speculation that Palantir, given its deep ties to US defence agencies, could benefit from a shift in government AI spending.

Last year, Palantir secured a contract worth up to $10 billion with the US Army and a $448 million deal with the Navy.

However, OpenAI subsequently said it had reached its own arrangement with the Pentagon.

Palantir generated $1.9 billion from US government contracts in 2025, underscoring its longstanding role as a major federal contractor.

Rosenblatt raises target price on Palantir stock

Despite Tuesday’s decline, Rosenblatt Securities raised its price target on Palantir to $200 from $150 and maintained a Buy rating, citing rising global instability and demand for defence-focused software solutions.

Rosenblatt analyst John McPeake argued that recent events highlight Palantir’s strategic importance to the military.

"War regrettably underscores the value of Palantir over just another LLM," McPeake wrote in a note to investors Tuesday, adding that the conflict will likely demonstrate the "strength and leverage" of Palantir against large language model developers such as OpenAI and Anthropic.

Wall Street is growing bullish on Palantir stock

Before the latest escalation with Iran, the Defense Department had already signalled it would award companies “bigger, longer contracts” for weapons systems with proven performance.

Stifel analyst Jonathan Siegmann wrote this week that conflict with Iran could make defence spending more urgent and less controversial.

Even prior to the Iran conflict, Wall Street sentiment toward Palantir had been improving.

Although concerns about AI-driven disruption contributed to the stock’s decline from record highs, the company is widely viewed as a beneficiary of AI spending trends, a view reinforced by its recent earnings performance.

In recent weeks, firms including UBS, Mizuho Securities, HSBC, Freedom Capital, Daiwa, Northland, Baird and William Blair have raised their ratings or price targets on the stock.