Palantir shareholders unsure if Musk’s attention is a good thing or not
The tech oligarch’s de facto takeover of the federal bureaucracy has huge implications for the company, whose biggest client remains the US government.
Elon Musk has been a fan of Palantir and its brash CEO for a while now. Over the weekend, he again demonstrated his support for Alex Karp after his new book topped The New York Times’ list of nonfiction bestsellers.
Interesting book https://t.co/1kFRqagCV8
— Elon Musk (@elonmusk) March 1, 2025
But not everyone seems comfortable with the level of attention the Tesla CEO is giving Palantir. While Musk’s Trump adjacency made Tesla one of the big winners of the market’s postelection run-up last year, his close association with right-wing politics both in the US and worldwide has had costs as well. Amid cratering sales in Europe, and signals that China sees Tesla as a potential point of leverage on the administration, Tesla stock has cratered by over 40% since December.
Over at a subreddit frequented by Palantir shareholders, Musk’s latest endorsement for Karp prompted a wave of debate both from those uncomfortable with his politics and work for the Trump administration ...
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byu/Fun-Journalist2276 from discussion
inPLTR
... to those who see a closer association with Musk as a clear boon to Palantir...
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byu/Fun-Journalist2276 from discussion
inPLTR
... and others who essentially say their investment in Palantir was premised in part on what they see as the potential corruption of the Trump administration and DOGE.
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byu/Fun-Journalist2276 from discussion
inPLTR
Musk’s position as the Trump administration’s semiofficial deputy, tasked with cutting the federal workforce and taking unprecedented control of key parts of the US government’s tech infrastructure, could clearly be consequential for Palantir. The data analytics and AI software company’s main customer remains the US government, due to its long standing focus on defense and intelligence applications.
On Wall Street, analysts have been trying to game out how the Trump administration’s DC disruptions — including potentially unprecedented cuts to defense spending and Musk’s DOGE — will work out for contractors.
Wedbush analyst Dan Ives, a longtime Palantir bull, wrote in a note out Monday:
“Palantir is so well positioned for this new disciplined spending environment at the Pentagon and this will ultimately be a positive growth catalyst as the various programs are scrutinized and as Karp & Co. get a bigger seat at the table in the Beltway. We also believe Palantir is attached to many programs/contracts in the DOD that are safe and not at risk of getting cut in this new spending climate given their high priority.”
Likewise, BofA analysts suggested in a note that some software and IT services companies would benefit from the administration’s cuts to the federal workforce:
“We see the cohort as net beneficiaries in a market landscape measured by modernization, efficiency, and outsourcing. Booz Allen Hamilton (Booz Allen Hamilton) and Palantir (PLTR) are most strongly positioned to early DOGE actions, in our view.”
At any rate, both Tesla and Palantir are up on the day, after tumbling 20% and 30% over the last two weeks, suggesting that the “bro bubble” may have a bit of air left in it yet.
