Palantir Technologies Inc (NASDAQ:PLTR) pared premarket gains Thursday, even as defense-linked stocks rallied on a sharp escalation in geopolitical risk and expectations for a sustained global rearmament cycle.
Markets have been repricing defense exposure as military conflict, industrial policy, and national security priorities converge, pushing governments, particularly the U.S, toward significantly higher defense spending.
That shift intensified after President Donald Trump called for a $1.5 trillion U.S. defense budget in 2027, marking over a 50% jump from current levels.
As per a Barron's report from 2025, Palantir's stock stands to gain from a rise in defense spending.
Trump's spending push comes amid an aggressive expansion of U.S. military posture.
Recent actions, including the capture of Venezuelan President Nicolás Maduro, signal that defense spending is being framed as a strategic necessity.
At the same time, the administration is reshaping how defense dollars are deployed.
Trump warned contractors to accelerate production or face penalties, while signaling restrictions on dividends, share buybacks pending capacity, R&D, and output expansion, Bloomberg reported on Thursday.
Palantir Valuation Debate Persists Despite Strong Fundamentals
CNBC's Jim Cramer acknowledged investor caution around Palantir's premium multiple. However, he argued that the fundamentals justify continued optimism.
He cited a Truist note, highlighting Palantir's ability to pair rapid growth with profitability under the "rule of 80."
Cramer also emphasized strong customer feedback, crediting Palantir's software with making organizations leaner, faster, and more effective.
PLTR Price Action: Palantir Technologies shares were down 2.37% at $177.38 at last check Thursday, according to Benzinga Pro data.
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