Alex Karp, CEO of Palantir Technologies, attended the 56th World Economic Forum Annual Meeting in Davos, Switzerland on January 20, 2026.
Dennis Bariboos | Reuters
Palantir Shares of the software and services provider to the U.S. government rose 15% in the wake of the U.S. attack on Iran, an outlier in a tough week for the stock market.
The tech-heavy Nasdaq fell 1.2% for the week, dragged down by the following stocks: apple, google and micronOther indicators also fell after a jump in oil prices and a report showed the U.S. economy unexpectedly shed jobs in February.
But investors have flooded into Palantir, which devotes about 60% of its profits to government spending and has strengthened ties with the military and intelligence agencies, as President Donald Trump shows no signs that the Iran war will end quickly. Meanwhile, Wall Street seems unconcerned about the government’s blacklisting of Anthropic, an artificial intelligence company that began partnering with Palantir in defense projects in late 2024.
Rosenblatt analysts maintained a buy recommendation on the stock and raised their price target from $150 to $200. The stock’s closing price on Friday was $157.16.
Analysts wrote that “the Middle East conflict bodes well” for Palantir’s government pipeline and that there are “good alternatives” to Anthropic’s Claude model. They added that further deals could be in the works, such as the company’s contract with the Army.
Last year, Palantir signed a $10 billion deal with the Army. The company also provides AI capabilities like weapon targeting to the military through its Maven Smart System program, and its tools were used in Iran.
As for its work with Anthropic, Palantir has not said anything publicly about its plans. A week ago, the Pentagon announced it was removing Anthropic’s technology from government contracts after the two countries failed to reach an agreement on how to use AI models for autonomous weapons and domestic surveillance.
Anthropic confirmed on Thursday that it had been formally notified that it had been designated as a supply chain risk, and CEO Dario Amodei said in a blog post that it had “no choice” but to challenge the decision in court.
Amazon, microsoft and googleall three cloud infrastructure leaders subsequently announced that they would continue to offer Anthropic’s products to customers on the cloud for non-defense projects.
Palantir and Amazon Web Services partnered with Anthropic in November 2024 to bring the Claude model to AWS and make it available to defense and intelligence agencies. In July, Anthropic won a $200 million contract with the Department of Defense, becoming the first AI lab to integrate its models into classified networks.
Analysts at Piper Sandler said in a note Tuesday that Anthropic is a “pioneer” for AI in data-sensitive environments like government, and suggested replacing Anthropic would be a headache. Still, we have a buy rating and a $230 price target on Palantir.
“While PLTR is model agnostic, onboarding and re-establishing embedded AI capabilities will likely take time,” the analysts wrote. “Time could have been spent on opportunities that would drive growth.”
Another factor contributing to Palantir’s rally this week was the rebound in software stocks. The sector has been battered in recent months by concerns that AI will replace software and disrupt long-standing business models. New AI tools, including Anthropic’s security products, have further fueled concerns and contributed to the decline in cybersecurity.
This week, the iShares Expanded Technology Software Sector ETF has soared nearly 8%. cloud strike, ServiceNow and App Labin Each rose more than 15%.
“We’ve just reached the point where everyone is shorting software,” DA Davidson analyst Gil Luria said in an interview. “Once you get to that point, you start to stabilize and get closer to the bottom. It’s all just market dynamics.”
WATCH: Anthropic challenges supply chain risk designation in court
