Palantir Technologies Inc. (NASDAQ: PLTR) received an important authorization from the Defense Information Systems Agency (DISA). The agency has now authorized Palantir Federal Cloud Service (PFCS) Forward to Impact Level 6 Provisional Authorizations. This is the agency’s most stringent level, reserved for the most sensitive information. In short, it’s the gold standard for Department of Defense (DoD) cloud workloads.
This means that Palantir’s entire technology stack (i.e., Apollo, Gotham, Foundry, and AIP) “can be deployed across any environment, from enterprise data centers to the tactical edge, on hardware of the customer’s choosing.”
In layman’s terms, that means that Palantir’s software can be deployed wherever it’s needed, even in sensitive, mission-critical settings. It also means that Palantir will continue to grow its total addressable market (TAM), which is key to understanding and supporting the company’s lofty valuation.
Critics of Palantir may acknowledge the win, but they’ll be quick to note that it’s another example of how Palantir’s current and future success is rooted in its government contracts. The thinking is that revenue from government contracts can be lumpy and subject to cancellation depending on the priorities of the party in power.
That said, Palantir has a footprint across the entire U.S. government, not just the DoD. That means that the revenue is “stickier” than perhaps the critics want to admit. It should also be noted that while Palantir has only been publicly trading since 2020, the company itself is over 25 years old. In that time, the company’s footprint inside the government is growing, not shrinking.
Commercial Count Continues to Grow
A more practical rebuttal to the “too reliant on government income” argument is the growth of the company’s commercial business. In its most recent earnings report, Palantir reported 8% sequential growth in its commercial customer count. That growth clocked in at 49% on a year-over-year (YOY) basis.
This is reflected in the company’s revenue, with commercial sales making up about 45%. Some critics might point out that since 55% depends on government business, it could pose a valuation risk.
Ideally, that’s true. But that’s making the perfect the enemy of the good. Three years ago, Palantir’s commercial business was almost non-existent. Due in part to the company’s Bootcamp training strategy and its artificial intelligence platform (AIP), Palantir has grown its commercial business at an astonishing rate.
Speaking of which, Palantir added another client on the commercial side. Rackspace Technology (NASDAQ: RXT) is partnering with Palantir to help Rackspace’s customers deploy Palantir’s Foundry and AIP on its systems. The goal is to help Rackspace generate revenue from its own AI offerings, including its Foundry for AI by Rackspace (FAIR) AI incubator.
One Bear Has Turned Bullish
Michael Burry continues to generate headlines for his bearish outlook on Palantir. Burry’s critique of the company has turned oddly personal as he examines Alex Karp’s private jet usage. But his view on the stock isn’t new, and based on recent PLTR stock price action, it looks largely priced in.
Against that backdrop, it’s worth noting that Freedom Capital recently upgraded Palantir.
However, this wasn’t just a move from a Hold to a Buy or a Sell to a Hold. The analyst firm moved the stock from a Strong Sell to a Strong Buy.
That kind of re-rating shouldn’t be ignored—but it’s also not the prevailing view on the Street. Palantir’s broader analyst consensus remains a Hold, even with the average price target sitting near $191.05, which implies about 46% upside from current levels.
PLTR Stock at an Inflection Point
The long-term bull case for PLTR stock is firmly in place, and the DISA authorization only adds to the company’s moat-like present. However, that hasn’t been enough to reverse PLTR's fortunes, which continue to slide in sympathy with the broader technology sector and, in particular, software stocks.
PLTR stock is down over 26% in 2026 and 23% in the 30 days ending Feb. 23. Could it drop further? That’s possible. Palantir is a high-beta stock, and any news that sends the broader market lower could trigger an outsized move in its price.
However, the chart shows a double bottom at around $130. That said, the stock is not oversold based on a momentum indicator like the relative strength indicator (RSI). Investors would need to see a confirmed break above $140 to $145 to suggest the bearish trend is broken.
A drop below $128 might push the price down to approximately $110. At that point, Palantir would be valued at about 27 times its 2027 earnings, which could attract many buyers.
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The article "Palantir Just Opened a New DoD Door—What Changes Now?" first appeared on MarketBeat.
