By Mackenzie Tatananni

Palantir Technologies climbed on Wednesday as concerns over a trade war with Beijing subsided and a wave of earnings reports offered encouraging signs about the artificial intelligence market.

Shares of the company, a major supplier of software to the federal government, rose 6.9% to $100.49. That put the stock in position for its highest close since Feb. 20, when it ended the session at $106.27.

The sharp gains came after President Donald Trump indicated that he would move to trim back tariffs once the countries negotiated a deal. "145% is very high and it won't be that high," Trump said of the current tax on Chinese imports on Tuesday. "It won't be anywhere near that high. It'll come down substantially. But it won't be zero."

The most obvious explanation is that Palantir was following the broader market's upswing. The S&P 500 and Dow Jones Industrial Average were both on track to rise more than 2% for a second consecutive day.

Concerns about government funding cuts and the stock's high valuation have battered shares so far this year, but they still remain up 35%.

It's no secret that Palantir is viewed as a major player in the artificial-intelligence market, particularly in the area of AI-powered data analytics. Earlier this year, CEO Alex Karp said the company was deepening its "position at the center of the AI revolution."

Palantir's software is used by the Department of Defense and other government agencies. The NATO Communications and Information Agency recently announced the acquisition of Palantir's Maven Smart System, which uses AI to collect and analyze large amounts of data.

Other factors could also have contributed to the stock's ascent on Wednesday. The gains came amid a string of earnings reports that indicated the AI trade is alive and well.

Just look at Vertiv, one of a handful of data-center infrastructure stocks. The company reported strong first-quarter earnings on Wednesday and pointed to "accelerated scaling of AI deployments across the data center market." The stock was up 11%.

Similarly, Amphenol, the maker of cables and connectors used in Nvidia systems, rose 10% as investors welcomed its own surprisingly strong results.

Palantir is set to report its own first-quarter earnings on May 5.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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April 23, 2025 14:27 ET (18:27 GMT)

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