Will the U.S. government buy a stake in Palantir stock?

On Tuesday, August 26, Commerce Secretary Howard Lutnick stated in a CNBC interview that the Trump administration is actively discussing taking equity stakes in major defense contractors.

More precisely, the discussion touched on the expansion of government ownership in Lockheed Martin (NYSE: LMT), RTX (NYSE: RTX), Boeing (NYSE: BA), and Palantir (NYSE: PLTR).

“There’s a monstrous discussion about defense. I mean, Lockheed Martin makes 97% of their revenue from the U.S. government. They are basically an arm of the U.S. Government!” said Lutnick.

As the remarks follow the government’s recent acquisition of a 10% stake in Intel (NASDAQ: INTC), the market was quick to scope in on Palantir, another primarily tech-oriented company, as potentially the next in line for a major acquisition.

Accordingly, PLTR shares were 2.35% yesterday, closing at $160.87. At press time, Wednesday, August 27, the shares were up 0.82% in pre-market. 

Will Washington invest in Palantir?

The speculation has been made complicated by the fact that Palantir is in a different situation compared to Intel, which was in need of government backing for its domestic semiconductor chip operations. 

On the contrary, Palantir is thriving, with more than half of its revenue already tied to federal contracts across not only defense but also intelligence and public health.

Therefore, a federal stake would be of a different nature, likely ensuring long-term access to the company’s proprietary artificial intelligence (AI) solutions.

However, with no official proposals or timelines being announced, it remains unclear whether any stakes would be minority or controlling positions, so all predictions are purely speculative. 

For now, Wall Street remains cautious, the consensus rating on PLTR being “Hold,” with an average price target of $154.47, implying a 3.98% downside from current levels as per a total of 19 ratings aggregated on market analysis platform TipRanks.

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