Wedbush: Palantir (PLTR.US) is expected to receive more orders from the US government, maintaining an "outperform" rating against the market.

After conducting channel checks in Washington D.C., Wedbush Securities is confident that Palantir Technologies (PLTR.US) may win more deals and see an increase in federal spending. The firm maintains its "outperform" rating on Palantir and a target price of $120. Analyst Dan Ives wrote in a report to clients, "Based on our conversations, an increasing number of individuals in Washington D.C. believe that efficiency focus of the DOGE plan could be a major breakthrough next year for companies like Palantir, as its unique software value proposition perfectly aligns with the broader Washington themes under Trump and Musk leadership. In turn, we believe Palantir can actually secure more deals and IT budgets across various government agencies, ultimately solidifying its position in the 25 fiscal year and 26 fiscal year federal budget cycles." Palantir's stock price has dropped by nearly one-third in the past two weeks after U.S. Defense Secretary Pete Hegseth issued a memorandum calling for an 8% annual reduction in defense spending over the next five years. However, Wedbush believes that considering Palantir's focus on artificial intelligence, the strict spending environment will allow Palantir to gain a larger share of the defense spending pie. Analysts added, "We continue to believe Palantir has many projects/contracts with the Department of Defense that are mission-critical and not at risk of being cut in the new spending environment due to their high priority."