William Blair Maintains a Neutral Rating on Palantir (PLTR) As DoD Awards Contract to OpenAI

Palantir Technologies Inc. (NASDAQ:PLTR) is one of the 12 Best Stocks to Buy and Hold for the Long Term. On June 16, William Blair analyst Louie DiPalma maintained a Hold rating on Palantir Technologies Inc. (NASDAQ:PLTR) without a price target. The neutral rating is based on the recent contract awarded to OpenAI by the US Department of Defence (DoD), which is valued at $200 million and signals increased competition for Palantir.

Analyst Louie DiPalma noted that while the contract with DoD is a significant win for OpenAI it could impact the market position of Palantir Technologies Inc. (NASDAQ:PLTR), particularly if OpenAI starts expanding into areas traditionally dominated by the company. Moreover, he also finds the current valuation of the company to be quite high and unsustainable given the increased competition. Louie DiPalma acknowledged that Palantir Technologies Inc. (NASDAQ:PLTR) has been a leader in securing AI-related contracts with DoD, however, the evolving landscape presents a challenging environment to maintain this dominance.

Regardless of the neutral rating, the management of the company remains optimistic. The company posted encouraging results for the fiscal first quarter of 2025 on May 5. It grew its United States revenue by 55% year-over-year to reach $628 million, out of this government revenue accounted for $373 million, reflecting a 45% increase year-over-year. Notably, the company closed 139 deals valued at least $1 million and 31 deals valued at least $10 million.

While we acknowledge the potential of PLTR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.