Trump Praises Palantir’s Military AI Capabilities as Stock Posts Worst Week in Over a Year
Why It Matters
Palantir Technologies, a key defense technology contractor supplying artificial intelligence tools to the U.S. military, saw its stock tumble sharply this week even as President Donald Trump publicly praised the company’s warfighting capabilities. The divergence between presidential endorsement and market performance raises questions about the future of AI-driven defense software stocks and the broader health of the technology sector.
With the U.S. military reportedly using Palantir’s AI-powered Maven Smart System to identify targets in the Middle East amid ongoing conflict with Iran, the company sits at the intersection of national security, tech market volatility, and White House politics.
What Happened
On Friday, President Trump posted a message to Truth Social praising Palantir Technologies, writing: “Palantir Technologies (PLTR) has proven to have great war fighting capabilities and equipment. Just ask our enemies!!!” The post came as the stock was in the midst of its worst weekly performance in more than a year, ultimately closing the week down approximately 14%.
The U.S. military is reportedly utilizing Palantir’s Maven Smart System — an AI-powered targeting platform — in connection with strikes on Iran that began in late February. Despite the company’s direct role in active military operations, investor confidence in the stock continued to erode throughout the week, including on the day of Trump’s post.
Watchdog group Citizens for Responsibility and Ethics in Washington (CREW) flagged Trump’s message, noting that Palantir had sponsored multiple Trump administration events and donated to the White House ballroom project. CREW described the post — which included the company’s stock ticker — as potentially “an attempt to help the stock price of a major backer that has struggled over the last six months.”
By the Numbers
- 14% — Palantir’s stock decline for the week, its worst performance in over a year
- ~$126 — Palantir’s share price following the weekly selloff
- More than 50% — Share of Palantir’s U.S. revenue derived from government contracts, including the Pentagon and Immigration and Customs Enforcement
- Under $50 per share — The fundamental value estimated by notable short seller Michael Burry, who said he continues to hold put options against the stock
Zoom Out
Palantir’s struggles are part of a broader selloff in software stocks tied to concerns that next-generation AI tools may displace traditional software business models. The release of Anthropic’s new Mythos model — in limited capacity, with the company citing potential misuse by hackers — rattled the sector this week.
The connection to Anthropic adds another layer of complexity for Palantir. The AI lab was blacklisted by the Department of Defense over concerns about autonomous weapons and government surveillance. Palantir uses Anthropic’s models on its platform, and while CEO Alex Karp told CNBC last month the company would “phase out” Anthropic’s models, that transition has not yet occurred.
Short seller Michael Burry, who has been publicly bearish on Palantir, acknowledged this week that Trump’s post could provide a short-term boost. “The stock may catch a wind here,” Burry wrote in a Substack post. “It has been selling off with software stocks. As mentioned, I continue to hold the puts, as I believe the fundamental value of this company is well under $50/share.”
The ongoing Iran conflict has put upward pressure on energy markets, though a recently announced ceasefire has provided some relief. A U.S.-Iran two-week ceasefire sparked a global market rally and sent oil prices lower, offering a brief reprieve for investors rattled by geopolitical risk. Oil prices dropped below $100 per barrel after the ceasefire promised safe passage through the Strait of Hormuz, easing one major pressure point on global supply chains.
What’s Next
Investors will be watching closely to see whether Trump’s public endorsement provides any sustained lift to Palantir’s share price in the coming trading sessions. Analysts will also monitor whether the company follows through on CEO Karp’s pledge to phase out Anthropic’s AI models from its platform, a move that could help restore its standing with the Department of Defense.
The broader software sector faces continued scrutiny as AI competition intensifies. Palantir’s government contract base — representing the majority of its domestic revenue — may provide a floor for the stock, but market sentiment toward AI-driven software companies remains cautious heading into the next earnings cycle.