Shares in Palantir (PLTR) soared on Wednesday, following speculation from William Blair analysts that the company is primed to support trimming efforts of government expenditure as directed by the Trump administration's Department of Government Efficiency.
During a client meeting on Wednesday, the analysts suggested Palantir's role in a forthcoming executive order. The order mandates federal agencies to develop a centralized payment tracking system, which the analysts believe is fitting for Palantir. They expect the company's artificial intelligence (AI) tools to become platforms of choice in this scenario.
Shares in Palantir surged nearly 7%, reaching $90.13 per share on Wednesday. The year-to-date growth of the stock is approximately 19%. Despite recent worries about a potential spend reduction potentially damaging the government contractor, the shares have seen more than threefold growth in the preceding 12 months.
William Blair analysts improved the stock rating from "underperform" to "market perform". They also suggested that the stock value could reach $125 within the next two years, provided the market shifts to a risk-on mode.
Earlier this week, Wedbush also regarded Palantir as a promising asset, labeling it as one of their "top names to own in 2025" with a reiterated price target of $120. They argued that the company could greatly benefit from a huge increase in federal spending on AI, even while other government contractors could face spending cuts. Wedbush added, "We believe Palantir could actually gain more deals and IT budget dollars across various government agencies."