Is Palantir just a momentum stock, or is there more to PLTR than meets the eye?

Virtus Investment Partners chief market strategist Joe Terranova continues to see further upside in Palantir Technologies Inc. (NASDAQ: PLTR) even though it’s already rallied more than 50% since early April.

According to Terranova, PLTR is not just a momentum name; there are actually “fundamental reasons” behind a continued surge in Palantir stock in 2025.

Last week, the big data analytics firm doubled down on its partnership with Google in hopes of winning more government contracts.

But the company’s commitment to stretching its wings in the commercial sector is just as attractive, the market veteran added.

Why is Terranova bullish on Palantir stock?

President Trump has reportedly ordered the Pentagon to lower its budget by 8% annually over the next five years.

On the surface, the news looks destructive for the likes of Palantir Technologies.

However, if anything, PLTR shares could benefit from that directive as its technology focuses on efficiency and cost-effectiveness, which aligns with the administration’s priorities.

Trump wants funds to be redirected to projects like border security and missile defense – areas where Palantir’s artificial intelligence and data-analysis solutions could play a significant role.

That said, Palantir stock does not currently pay a dividend, which makes it an inappropriate pick for income investors.

PLTR shares could benefit from commercial growth

Even if the US government trims its spending on defense, PLTR could do just fine, as others, like Spain and Germany, are increasing their defense spending in 2025.

Additionally, Joe Terranova is bullish on Palantir shares as the company’s management is “doing a really good job” in strengthening its footprint in the commercial sector.

In the latest report, the firm’s US commercial revenue went up an exciting 64% on a year-over-year basis.

Terranova has immense confidence in the leadership of Alex Karp, who, he believes, is expediting the company’s expansion into the commercial space.

Still, the consensus rating on Palantir stock currently sits at “hold” only.

Palantir stock price analysis: Is PLTR headed for a new high?

Joe Terranova’s remarks on Palantir Technologies arrive only days before it’s scheduled to report its financial results for the first quarter. 

Consensus is for the big data analytics firm to earn 8 cents on a per-share basis in its current quarter, double the 4 cents per share it earned in the same quarter last year.

According to the chief market strategist, the company’s upcoming earnings on May 5^th may be the catalyst that pushes its stock price beyond its previous high of about $125.

All in all, “it’s the commercial division, it’s NATO using Maven Smart System. That’s where Palantir Technologies has differentiated itself,” he concluded.

Investors should note, however, that Street’s average price target on Palantir stock is about $94 at writing, which translates to a 15% downside from current levels.

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