To The Moon

The Fall. It was a correction that no one saw coming. It started on late Wed, 19 Feb 2025 when news headline flashed that US Defense Secretary, Pete Hegseth ordered senior military officials to develop a high-level budget plan by 24 Feb 2025, that would slash defense spending by -8% for the next 5 years. The 8% annual cut would mean almost -$300 billion less in military spending through fiscal 2030. This hit $Palantir Technologies Inc.(PLTR)$ head-on and the AI-company pulled back -10% from its all-time highs and caused related algorithmic selling. (see below) On Thu, 20 Feb 2025, investors continued to dump PLTR, escalating concerns that the latest hot pick among retail traders could be fizzling out. PLTR retreated more than -5% intraday. (see above) “Luckily”, it regained some grounds in afternoon trading. In just 2 days, PLTR lost -14.72%, marking the stock’s worst session since May 2024. Defense Budget Cut. Based on recent developments, it appears that Defense Secretary's proposed budget cuts are more likely to affect traditional defense contractors like $Lockheed Martin(LMT)$ and $RTX Corp(RTX)$, rather than newer tech-focused companies like PLTR. Below are the reasons: (1) Shift in priorities: The budget cut seeks to realign defense spending with President Trump's priorities eg. border security and modernizing the nuclear force. (2) Exemptions: The memo also outlined exemptions (from budget cut) in some areas eg. (a) uncrewed.unmanned systems, (b) cybersecurity, and (c) AI-related technologies. And these are areas where PLTR specializes. (3) New technologies focus: Pentagon is also prioritizing funding for emerging technologies like AI and data analytics, that are PLTR's strengths. US Army recently extended PLTR's contract for its AI-enabled Vantage system, worth up to $619 million. (see below) (4) Traditional programs at risk: The cuts do not protect / exempt weapons systems previously designated as critical, including Columbia-class submarines and various manned aircraft. These are typically produced by traditional contractors like Lockheed Martin and Raytheon. (5) New defense tech consortium: Palantir is part of a group of tech companies, including Anduril, SpaceX, and OpenAI, forming a consortium to bid on defense contracts. (see above) This move aims to disrupt the oligopoly of traditional "prime" contractors. Future of War Fare. Future warfare leveraging advanced technologies like artificial intelligence (AI) and quantum computing is likely to be characterized by: (1) Algorithmic warfare: AI-driven autonomous systems and drones will become integral to military operations, enhancing intelligence, surveillance, reconnaissance, and decision-making processes. (see below) (2) Quantum-enhanced capabilities: Quantum computing will revolutionize cryptography, potentially breaking traditional encryption methods while enabling secure quantum communication channels. (3) Advanced sensing and detection: Quantum sensors could detect stealth aircraft, enemy missile launches, or even nuclear weapons signatures with unprecedented accuracy. (4) Predictive conflict management: Quantum computing's data processing power could enable real-time analysis of geopolitical, economic, and social variables to forecast potential conflict zones. (see below) (5) Quantum-powered AI: Autonomous systems controlled by quantum-enabled AI could operate with unparalleled agility and adaptability in dynamic combat environments1. (6) Information warfare: Quantum computing's data processing capabilities could enhance influence operations and counter-disinformation efforts1. This technological frontier will likely reshape military strategies, emphasizing speed, precision, and information dominance while raising new ethical and security challenges. Will it be the traditional contractors or leading-edge AI company like PLTR that will have an upper hand this niche and unchartered frontier ? The answer is obvious, no ! Back to current, the full impact of the defense budget cuts is yet to be determined as the high level plan is not cooked. Current inkling suggests that cutting-edge, tech-focused defense companies like PLTR, may be better positioned to weather these changes compared to traditional defense contractors. Will investors be less nervous and more confident about PLTR, after reading my compilations ? What do you think ? Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. WMT leads US market tumble: Time to buy ? Decode US Economic Data : Invest Smarter ! Quantum's Here to Stay, Start Investing ! Do you think new and cutting-edge technology companies will be future for US Defense department? Do you think Palantir’s future in US Department of Defense is “secured” ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents