Palantir May Cut Ties with Anthropic Due to Pentagon Restrictions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy PLTR?
AI company Anthropic has served the U.S. government through its partnership with Palantir for over a year, but the Pentagon's decision last week to restrict military contractors from using Anthropic's technology could force Palantir to sever its ties with the company, The Information's Aaron Holmes, Sri Muppidi, Rocket Drew and Julia Hornstein report. Roughly 42% of Palantir's nearly $4.5B in revenue last year came from U.S. government contracts, the authors note.
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Analyst Views on PLTR
Wall Street analysts forecast PLTR stock price to rise
17 Analyst Rating
5 Buy
10 Hold
2 Sell
Hold
Current: 157.160
Low
50.00
Averages
192.88
High
255.00
Current: 157.160
Low
50.00
Averages
192.88
High
255.00
About PLTR
Palantir Technologies Inc. is engaged in building software to assist in counterterrorism investigations and operations. The Company has built four principal software platforms, including Palantir Gotham (Gotham), Palantir Foundry (Foundry), Palantir Apollo (Apollo), and Palantir Artificial Intelligence Platform (AIP). Apollo is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Gotham enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants. Foundry transforms the ways organizations operate by creating a central operating system for their data. AIP enables responsible artificial intelligence (AI)-advantage across the enterprise by using primary, core components built to effectively activate large language models and other AI within any organization.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Palantir's Strong Growth Potential Analysis
- Growing Customer Base: Palantir's rapidly expanding customer base is projected to drive a 60% revenue increase in 2026, reaching $7.2 billion, indicating strong market demand fueled by the swift adoption of AI solutions.
- Robust Revenue Pipeline: By the end of 2025, Palantir's remaining deal value reached $8.6 billion, a 91% year-over-year increase, highlighting the company's strong contract fulfillment capabilities and significant future revenue growth potential.
- Improved Profitability: In Q4 2025, Palantir's revenue surged 70% year-over-year to $1.4 billion, with earnings rising nearly 80%, showcasing the company's success in securing larger contracts from existing customers.
- Optimistic Market Outlook: The AI software market is expected to grow at a 38% annual rate through 2033, and Palantir is outpacing this growth, potentially achieving a 40% stock price increase in the coming year.
See More
Anthropic Faces Pentagon Ban Amid Controversy
- Pentagon Ban: The Department of Defense has designated Anthropic as a supply chain risk, prohibiting its technology from use in sensitive military environments, jeopardizing hundreds of millions in contracts and straining its relationship with the Pentagon.
- Legal Challenge: Anthropic has filed a lawsuit against the Trump administration, claiming the ban is 'unprecedented and unlawful' and asserting that it causes irreparable harm to the company, potentially threatening its future business prospects.
- Technological Dependence: Despite the shocking decision, many officials view Anthropic's AI models as superior for military applications, particularly in their integration with existing contractors like Palantir, highlighting a significant reliance on this technology.
- Market Pressure: Since its founding in 2021, Anthropic has raised billions, achieving a valuation of $380 billion, but faces intense competition from rivals like OpenAI, forcing it to accelerate commercialization efforts to maintain its market position.
See More
AI Disruption Causes Software Stocks to Plummet
- SaaS Market Turmoil: In 2023, software-as-a-service (SaaS) stocks have significantly declined compared to broader indexes like the S&P 500 and Nasdaq Composite, reflecting market concerns over their future growth, particularly amid rapid advancements in AI technology that have shaken investor confidence.
- Impact of Anthropic: The release of Anthropic's Claude Cowork tool, which can complete complex workflows without human intervention, poses a direct threat to the market positions of companies like Salesforce and Palantir, prompting investors to reassess the growth prospects of these traditional software providers.
- Market Reaction: Since the launch of Claude Cowork, several high-profile SaaS stocks have plummeted, indicating a weakening of market confidence in their long-term profitability, especially as the competitive landscape shifts with the emergence of AI agents.
- Investment Strategy Adjustment: In the current market environment, investors are advised to proceed with caution, particularly as volatility in software stocks increases, with only those companies possessing specialized solutions and unique data likely to survive in the future competitive landscape.
See More
Anthropic Sues Trump Administration Over Blacklisting as National Security Threat
- Lawsuit Initiated: Anthropic filed a lawsuit on Monday in the Northern District of California against the Trump administration, claiming that being blacklisted and labeled a national security threat is 'unprecedented and unlawful,' causing irreparable harm to the company.
- Contract Risks Escalate: The complaint states that Anthropic's contracts with the federal government are already being canceled, and future contracts with private parties are also in jeopardy, potentially jeopardizing hundreds of millions of dollars in the near term, severely impacting the company's financial health.
- Reputation Damage: The lawsuit emphasizes that Anthropic's reputation and core First Amendment freedoms are under attack, and without judicial relief, these harms will only compound in the coming weeks and months, potentially affecting the company's market position.
- Defense Department Restrictions: President Trump directed federal agencies last month to 'immediately cease' all use of Anthropic's technology, requiring defense contractors to certify they do not use the company's models, further limiting its business opportunities.
See More
Palantir Rallies Amid Broader Market Downturn
- Stock Price Surge: Palantir's shares rose 15% between February 27 and March 6, defying a broader market downturn driven by geopolitical tensions and policy shifts, demonstrating its resilience in uncertain environments.
- Government Spending Dependency: With approximately 60% of its revenue derived from government contracts, Palantir's expansion in military and intelligence work has attracted investor optimism as tensions in the Middle East escalate, further boosting its stock price.
- Analysts Optimistic Outlook: Rosenblatt maintained a 'Buy' rating on Palantir and raised its price target from $150 to $200, citing the company's strong defense positioning as a key factor supporting its stock price amid rising tensions in the region.
- CEO's Warning: Palantir CEO Alex Karp issued a stark warning at the a16z American Dynamism Summit, stating that sidelining the U.S. military while replacing white-collar jobs with AI could provoke government intervention, highlighting potential risks of technology nationalization.
See More
Microsoft Launches AI-Enhanced Office, Prices Up 65%
- Product Upgrade and Pricing: Microsoft has launched the Microsoft 365 E7 subscription at $99 per user per month, a 65% increase from the $60 E5 subscription, aimed at attracting enterprise users to adopt its Copilot AI add-on, thereby boosting overall revenue.
- AI Investment Returns: The company has invested over $100 billion in data center infrastructure over the past year, particularly in Nvidia chips to support AI model operations, with AI product sales being a crucial way to demonstrate returns on this investment, expected to drive future profit growth.
- New Feature Release: Copilot Cowork will be introduced as a research preview, designed to handle multi-step tasks such as sending scheduled emails and preparing meeting documents, which is anticipated to further drive the adoption of Copilot and enhance user productivity.
- Market Expansion Potential: Analysts note that the launch of the E7 subscription will encourage more organizations to upgrade to E5, with Microsoft’s 365 commercial products and cloud services representing 30% of total revenue in the December quarter, indicating strong growth potential in the market.
See More
Palantir's Strong Growth Potential Analysis
- Growing Customer Base: Palantir's rapidly expanding customer base is projected to drive a 60% revenue increase in 2026, reaching $7.2 billion, indicating strong market demand fueled by the swift adoption of AI solutions.
- Robust Revenue Pipeline: By the end of 2025, Palantir's remaining deal value reached $8.6 billion, a 91% year-over-year increase, highlighting the company's strong contract fulfillment capabilities and significant future revenue growth potential.
- Improved Profitability: In Q4 2025, Palantir's revenue surged 70% year-over-year to $1.4 billion, with earnings rising nearly 80%, showcasing the company's success in securing larger contracts from existing customers.
- Optimistic Market Outlook: The AI software market is expected to grow at a 38% annual rate through 2033, and Palantir is outpacing this growth, potentially achieving a 40% stock price increase in the coming year.
See More
Anthropic Faces Pentagon Ban Amid Controversy
- Pentagon Ban: The Department of Defense has designated Anthropic as a supply chain risk, prohibiting its technology from use in sensitive military environments, jeopardizing hundreds of millions in contracts and straining its relationship with the Pentagon.
- Legal Challenge: Anthropic has filed a lawsuit against the Trump administration, claiming the ban is 'unprecedented and unlawful' and asserting that it causes irreparable harm to the company, potentially threatening its future business prospects.
- Technological Dependence: Despite the shocking decision, many officials view Anthropic's AI models as superior for military applications, particularly in their integration with existing contractors like Palantir, highlighting a significant reliance on this technology.
- Market Pressure: Since its founding in 2021, Anthropic has raised billions, achieving a valuation of $380 billion, but faces intense competition from rivals like OpenAI, forcing it to accelerate commercialization efforts to maintain its market position.
See More
AI Disruption Causes Software Stocks to Plummet
- SaaS Market Turmoil: In 2023, software-as-a-service (SaaS) stocks have significantly declined compared to broader indexes like the S&P 500 and Nasdaq Composite, reflecting market concerns over their future growth, particularly amid rapid advancements in AI technology that have shaken investor confidence.
- Impact of Anthropic: The release of Anthropic's Claude Cowork tool, which can complete complex workflows without human intervention, poses a direct threat to the market positions of companies like Salesforce and Palantir, prompting investors to reassess the growth prospects of these traditional software providers.
- Market Reaction: Since the launch of Claude Cowork, several high-profile SaaS stocks have plummeted, indicating a weakening of market confidence in their long-term profitability, especially as the competitive landscape shifts with the emergence of AI agents.
- Investment Strategy Adjustment: In the current market environment, investors are advised to proceed with caution, particularly as volatility in software stocks increases, with only those companies possessing specialized solutions and unique data likely to survive in the future competitive landscape.
See More
Anthropic Sues Trump Administration Over Blacklisting as National Security Threat
- Lawsuit Initiated: Anthropic filed a lawsuit on Monday in the Northern District of California against the Trump administration, claiming that being blacklisted and labeled a national security threat is 'unprecedented and unlawful,' causing irreparable harm to the company.
- Contract Risks Escalate: The complaint states that Anthropic's contracts with the federal government are already being canceled, and future contracts with private parties are also in jeopardy, potentially jeopardizing hundreds of millions of dollars in the near term, severely impacting the company's financial health.
- Reputation Damage: The lawsuit emphasizes that Anthropic's reputation and core First Amendment freedoms are under attack, and without judicial relief, these harms will only compound in the coming weeks and months, potentially affecting the company's market position.
- Defense Department Restrictions: President Trump directed federal agencies last month to 'immediately cease' all use of Anthropic's technology, requiring defense contractors to certify they do not use the company's models, further limiting its business opportunities.
See More
Palantir Rallies Amid Broader Market Downturn
- Stock Price Surge: Palantir's shares rose 15% between February 27 and March 6, defying a broader market downturn driven by geopolitical tensions and policy shifts, demonstrating its resilience in uncertain environments.
- Government Spending Dependency: With approximately 60% of its revenue derived from government contracts, Palantir's expansion in military and intelligence work has attracted investor optimism as tensions in the Middle East escalate, further boosting its stock price.
- Analysts Optimistic Outlook: Rosenblatt maintained a 'Buy' rating on Palantir and raised its price target from $150 to $200, citing the company's strong defense positioning as a key factor supporting its stock price amid rising tensions in the region.
- CEO's Warning: Palantir CEO Alex Karp issued a stark warning at the a16z American Dynamism Summit, stating that sidelining the U.S. military while replacing white-collar jobs with AI could provoke government intervention, highlighting potential risks of technology nationalization.
See More
Microsoft Launches AI-Enhanced Office, Prices Up 65%
- Product Upgrade and Pricing: Microsoft has launched the Microsoft 365 E7 subscription at $99 per user per month, a 65% increase from the $60 E5 subscription, aimed at attracting enterprise users to adopt its Copilot AI add-on, thereby boosting overall revenue.
- AI Investment Returns: The company has invested over $100 billion in data center infrastructure over the past year, particularly in Nvidia chips to support AI model operations, with AI product sales being a crucial way to demonstrate returns on this investment, expected to drive future profit growth.
- New Feature Release: Copilot Cowork will be introduced as a research preview, designed to handle multi-step tasks such as sending scheduled emails and preparing meeting documents, which is anticipated to further drive the adoption of Copilot and enhance user productivity.
- Market Expansion Potential: Analysts note that the launch of the E7 subscription will encourage more organizations to upgrade to E5, with Microsoft’s 365 commercial products and cloud services representing 30% of total revenue in the December quarter, indicating strong growth potential in the market.
See More
