- Shares of Palantir Technologies soared over the past week on strong earnings and guidance, just as Elon Musk’s DOGE embarked on an aggressive campaign to upend government workforce and spending practices.
Data-mining software company Palantir Technologies may be in the right place at the right time as Elon Musk’s Department of Government Efficiency looks to disrupt federal hiring and spending practices.
Shares soared 34% over the past week, closing at $110.85 on Friday, after the company reported strong fourth-quarter earnings and upbeat yearly guidance late Monday.
Palantir is known for putting its AI-powered platforms to work in the defense and intelligence sectors, but it has also been expanding in the commercial space recently. Those gains and its inclusion in the S&P 500 index helped shares surge 340% last year.
In fact, the 64% jump in Palantir’s US commercial revenue last quarter outpaced its 45% gain in government revenue, fueling investor enthusiasm.
The quarterly results prompted Bank of America to raise its price target on Palantir stock to $125 from $90 and reiterate its buy rating.
“The company sees the world ripe for an AI and technology revolution,” analysts said in a note on Tuesday. “We see PLTR enabling and leading this revolution in both Commercial and Defense markets.”
Meanwhile, Musk’s DOGE is looking to slash the federal workforce and spending in moves reminiscent of his takeover of Twitter in 2022.
His team of young DOGE engineers is reportedly bringing beds into government buildings, staking out territory with sticky notes, and questioning workers on their usefulness.
“While not a consensus view, we think the Department of Government Efficiency (DOGE) could be a major opportunity for government efficiency enablers,” BofA said.
If DOGE ushers in an era of commercial-like contracting, digital-first development requirements, and open-architecture requirements, then Palantir’s line of businesses and approach to government contracts are “already in line,” analysts added.
Palantir executives were similarly bullish during a conference call with analysts late Monday after reporting fourth-quarter earnings.
Chief Technology Office Shyam Sankar said DOGE will bring meritocracy and transparency to government, which fits with Palantir’s business.
“The commercial market is meritocratic and transparent, and you see the results that we have in that sort of environment. And that’s the basis of our optimism around this,” he added. “I think the work that we’ve done in government, it’s deeply operational, it’s deeply valuable, and we’re pretty excited about exceptional engineers getting in there under the hood and being able to see that for a change.”
After trying to dismantle the US Agency for International Development, DOGE is expected to take on some of the biggest areas of government spending.
On Friday, President Donald Trump said he instructed Musk to “check out” the Pentagon, which has a 2025 budget of $850 billion.
For his part, CEO Alex Karp said Palantir loves disruption, which helps expose things that aren’t working.
“There’s a revolution. Some people get their heads cut off,” he told analysts on Monday. “It’s like, we’re expecting to see really unexpected things and to win basically. That’s what we’re going to do.”