Heading into the final day of trading, shares of Palantir Technologies (PLTR +1.25%) have jumped 10.8% this week, according to data provided by S&P Global Market Intelligence. The stock is gaining momentum as the U.S. military is engaged in a war with Iran.
The U.S. government's fight with another artificial intelligence (AI) firm may also be stoking investor interest in Palantir this week.
Image source: The Motley Fool.
The power of AI
The recent attack on Iran and conflict in the Middle East have spotlighted defense stocks, and Palantir, a provider of AI software to the U.S. government, is among them. Much of investors' focus on Palantir over the last year has been on its ability to move beyond government contracts and grow its commercial business. While the commercial business is growing faster, over half of the company's domestic sales still come from government work, which grew 66% year over year in Q4.
Baird Technology Strategist Ted Mortonson commented about the company this week on the Yahoo! Finance "Market Domination" podcast. He noted that, along with the U.S. Department of Defense, the Israeli Defense Force (IDF) uses Palantir software. He noted that the current conflict represents the power of its software "in real time, and also some predictive technology that we never had before."
NASDAQ: PLTR
Key Data Points
Investors this week also feel that Palantir could benefit from the Defense Department's dispute with AI firm Anthropic, which has been temporarily banned from all U.S. government business. As AI becomes embedded in military organizations and weapon systems, Palantir's role looms ever larger.
Investors are likely considering the company's potential global market size and buying the stock, especially given shares are well off their 2026 high of more than $180.
