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After the closing bell on May 5, Palantir (PLTR) reported its highly anticipated Q1 2025 results, which beat analysts’ revenue and earnings estimates. Despite the upside surprise, PLTR shares fell about 12% on Tuesday as investors reacted to the news. Investors focused on a 10% drop in global sales, worries that government budget cuts will pinch future contracts, and concerns that the stock already trades at rich valuations.
Still, Wedbush recently named Palantir a top pick for 2025. Their analysts argue that Palantir’s AIP platform - its artificial intelligence (AI)‑powered engine for government and enterprise clients - could actually win more business when agencies scramble for efficiency amid a proposed $165 billion cut in federal spending. Rather than sidelining Palantir, Wedbush argues that the cuts could spur demand for its specialized AI tools. The firm's analysts also raised Palantir's price target from $120 to $120, citing the expected AI demand surge.