Veteran fund manager reboots Palantir stock price target ahead of earnings

There’s gold in that thar Capitol Hill; you just have to know where to look.

During his first address to a joint session of Congress on March 4, President Donald Trump said the U.S. would pursue a “Golden Dome” similar to Israel’s “Iron Dome” defense system, which is designed to protect against missile attacks.

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“My focus is on building the most powerful military of the future,” Trump said. “As a first step, I’m asking Congress to fund a state-of-the-art ‘Golden Dome’ missile defense shield to protect our homeland — all made in the USA.”

Trump said that President Ronald Reagan had wanted to build a similar system during his term, but the technology to make it happen at the time wasn’t available.

“Israel has it, other places have it, and the United States should have it, too,” Trump said. “This is a very dangerous world. We should have it. We want to be protected. And we’re going to protect our citizens like never before.”

This kind of protection don’t come cheap and House Republicans released legislation that if passed would increase Pentagon spending by $150 billion, The Hill reported on April 28, pushing the total defense budget for fiscal 2025 to more than $1 trillion.

Fund manager sees possibilities for Palantir 

The bill, developed by the House and Senate Armed Services committees, includes nearly $25 billion earmarked for the Golden Dome project.

The Arms Control Association has decried that project as “a misguided and dangerous approach to securing the American homeland that will create enormous opportunity costs at a time of strained defense resources.”

Golden Dome promises to be a boon for defense contractors, and SpaceX, which is owned by Tesla  (TSLA)  CEO Elon Musk, had reportedly joined a bid for the project.

The world’s richest man, known for wielding his chainsaw through the federal employment rolls in sweeping and controversial job cuts via the Department of Government Efficiency, later denied that claim on his X social-media platform.

“Our strong preference would be to stay focused on taking humanity to Mars,” he wrote. “If the President asks us to help in this regard, we will do so, but I hope that other companies (not SpaceX) can do this.” 

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The increased defense spending caught the eye of TheStreet Pro’s Chris Versace, who sees possibilities for big data analytics company Palantir  (PLTR) . 

“We are once again lifting our price target on one of the Pro Portfolio’s newer positions, Palantir Technologies,” he said in his TheStreet Pro column.

Government contracts account for roughly 55% of Palantir’s revenue, so a boost in the Pentagon’s budget should be music to the ears of the company’s outspoken CEO, Alex Karp. 

“Soldiers in war zones preferred Palantir because it worked, and it happened to only cost millions of dollars,” Karp told analysts during the company’s last earnings call in February. “And I think Doge is going to bring meritocracy and transparency to government, and that’s exactly what our commercial business is.”

Palantir wins NATO contract

Defense companies, including Palantir, saw their stocks tumble recently, largely on trade-war concerns and the Pentagon’s announced plan to cut its budget by $50 billion annually.

But the sector is on the upswing lately, with the SPDR S&P Aerospace & Defense ETF  (XAR)  climbing 25% from a year ago.

Related: Analysts reset Palantir stock forecast amid rally

Shares of Palantir are up 56% since January, and a mind-boggling 436% — yeah, you read that right — from a year ago.

Earlier this month, Versace, lead portfolio manager for TheStreet Pro Portfolio, boosted his price target for Palantir to $105 from $95 after the company landed a deal to supply the North Atlantic Treaty Organization with its Maven Smart System, an AI-powered platform designed to improve decision-making in military operations.

“Our latest boost, which comes ahead of Palantir’s quarterly earnings report on May 5, stems in part from the company’s collaboration with Google Cloud to bring [the] FedStart platform to public sector customers,” he said. 

FedStart facilitates the deployment and certification of software within U.S. federal government agencies. 

The partnership with Palantir and Alphabet’s Google  (GOOGL)  Cloud is intended to simplify the process for companies to offer their software solutions to federal agencies, accelerating innovation and streamlining compliance.

Versace said his newest price target was also related to the shrinking prospect of Doge-related cuts and the potential for a larger-than-expected defense spending program.

“That combination, plus other wins noted in recent weeks, is leading us to lift our PLTR target to $125 from $105,” he said. “The Pro Portfolio’s PLTR position is on the smaller side, and being the disciplined investors we are, we would be open to using any meaningful pullback in the stock to add to our holdings.”

Related: Veteran fund manager who forecast S&P 500 crash unveils surprising update

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