President Donald Trump publicly commended Palantir Technologies Inc. (PLTR) in a Truth Social post on Friday, as the artificial intelligence software firm's shares experienced a steep 15% decline this week. Reports indicate Palantir's technology is being utilized on the battlefield in Iran, and the company is benefiting from close ties and government contracts with the Trump administration. Noted short-seller Michael Burry has once again targeted the company's stock this week.
President Trump stated on the platform: "Palantir Technologies Inc. (PLTR) has proven to possess formidable combat capabilities and equipment. Just ask our enemies!!!" According to reports, the U.S. military is employing Palantir's AI-based "Maven Smart System" platform to identify targets in the Middle East, with operations linked to airstrikes against Iran that began in late February. Over half of Palantir's U.S. revenue comes from government entities, including the Pentagon and U.S. Immigration and Customs Enforcement.
For years, CEO Alex Karp has openly supported the U.S. military and advocated for equipping personnel with the most advanced tools. Although Karp previously criticized Trump and donated to President Biden's campaign, he has now shifted his support to the new administration and its policies. Karp frequently defends Palantir when the company faces criticism for providing tools used to monitor immigrants and American citizens. He previously told CNBC that his public pro-Israel stance following the October 7 Hamas attacks led to some employee departures.
In October last year, Palantir's Head of Public Relations, Lisa Gordon, expressed during an interview at an event hosted by The Information that the company's political shift toward the Trump administration was "concerning." The related video was promptly removed from The Information's YouTube and social media pages. Palantir also has connections with AI lab Anthropic, which was blacklisted by the U.S. Department of Defense over concerns its tools could be used for autonomous weapons and government surveillance. Palantir uses models from Anthropic and other AI labs on its platform. Karp told CNBC last month that Palantir would "phase out" Anthropic's models, but this has not yet been implemented.
This week, Anthropic released its new Mythos model in a limited capacity, sparking market fears it could be misused by hackers and leading to a sell-off in software stocks. Concerns that new AI tools will displace traditional software models have been troubling the industry for months. Prominent short-seller Michael Burry has recently continued targeting Palantir and other AI-themed stocks. In a since-deleted post this week, he wrote that Anthropic is "taking Palantir's business." Following Trump's post, Burry commented again on the company. Burry stated in a Substack post: "The stock might bounce on this. It had already been sold off with software stocks. As I said before, I am still holding puts because I believe the company's fundamental value is well below $50 per share." After this week's sharp decline, which accelerated on the day of Trump's post, the stock currently trades at approximately $128.
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