Why Palantir Stock (PLTR) Tumbled Today and Why One Analyst Still Sees Upside

Palantir (NASDAQ:PLTR) shares are down nearly 5% today, slipping back below the $150 level after spending the past few weeks consolidating just above that mark. The move comes as weakness across the broader tech space is weighing on high-growth names, with sentiment turning more cautious as geopolitical tensions tied to the escalating conflict with Iran add another layer of uncertainty to global markets.

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Yet, those same geopolitical tensions that are weighing on sentiment could also play directly into Palantir’s strengths, particularly as defense priorities move higher up the agenda. That backdrop is already evident on the government side of the business, where Palantir appears to be deepening its role in large-scale initiatives.

According to The Wall Street Journal, Anduril and Palantirare working on the software for the Golden Dome Missile Shield. Space Force General Michael Guetlein, the project’s lead, said on March 17, that the system’s first phase will cost $185 billion, a 50% increase from the initial $125 billion estimate. While the article references both companies, Palantir’s Maven Smart System was officially designated on March 20 by the Department of War as the system of record for battlefield command-and-control.

Based on the software involved and previous major defense contracts, Rosenblatt analyst John McPeake believes that the Golden Dome could generate several billion dollars for Palantir during its first phase. Similar missile defense programs like Aegis BMD, IBCS, Space C2, and JADC2 have historically allocated 20-50% of their budgets to software, with total annual costs estimated between $3 billion and $8 billion.

As a broad and potentially all-encompassing missile defense system, Golden Dome “looks to dwarf these other programs by multiple orders of magnitude.” If the $185 billion budget is spread over 2026 to 2028, the yearly expenditure would be roughly $60 billion, meaning that, following historical software allocation ratios, more than $12 billion per year could be devoted to software alone.

“Given the significant trend towards AI and automation in missile target systems,” McPeake went on to say, “we think there is a good chance that the percentage of the budget spent on software will be greater than prior programs.” With Palantir having been anointed as the system of record with Maven, the company appears well-positioned to capture at least its “fair share” of this spending.

While Palantir’s Commercial demand has been exceptionally strong, the Golden Dome program “buttresses the Government demand picture nicely.” In Q4, Palantir reported U.S. commercial revenue growth of 137% year-over-year, with remaining deal value increasing 145%, bringing overall commercial revenue growth to 82%. McPeake expects the commercial momentum to continue this year. U.S. government revenue also posted solid growth at 66% y/y, though analysts currently project it to slow to 42% in 2026 and 31% in 2027.

“If Golden Dome begins to ramp, we think those numbers will start looking quite conservative,” McPeake added.

Meanwhile, analyst projections for Palantir’s combined government revenue over 2026, 2027, and 2028 total $13.6 billion, which is 25% below McPeake’s estimate of $18.2 billion for the same period.

“We think Golden Dome is supportive of upside to Street and more in-line–or better than–our above-consensus 2026 to 2028 forecasts,” the analyst summed up.

Bottom line, McPeake assigns PLTR shares a Buy rating, backed by a $200 price target. Should the figure be met, investors will be pocketing returns of 29% a year from now. (To watch McPeake’s track record, click here)

The broader Street is largely in agreement, but with a touch more caution. The stock carries 13 additional Buys, alongside 4 Holds and 2 Sells, resulting in a Moderate Buy consensus rating. Based on the $194.61 average price target, shares are still seen rising about 32% from current levels. (See PLTR stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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