Investing.com -- Wedbush analysts see upside for Palantir Technologies (NASDAQ:PLTR) as the evolving spending environment in Washington, D.C., aligns with the company’s strengths. 

The firm said it has been speaking to more of its Beltway contacts over the last few weeks to get better insight into the current massively changing spending environment in DC and how this could impact Palantir looking forward.

“The efficiency focus of the DOGE initiatives could be a major coup for the likes of Palantir over the next year,” Wedbush said, noting that Palantir’s software solutions are well-positioned to capitalize on the changing priorities under the Trump administration.

Despite concerns about potential cuts to government budgets, Wedbush believes Palantir will not only avoid reductions but could gain additional contracts. 

“Palantir could actually gain more deals and IT budget dollars across various government agencies and ultimately further entrench PLTR in the FY25 and FY26 federal budget cycle,” the analysts said.

Palantir’s stock has faced pressure following the administration’s announcement of an 8% annual cut to defense spending. 

However, Wedbush disputes the idea that this will hurt the company. “This is exactly the opposite of how we believe these DOD cuts will play out… Palantir’s unique software approach will enable the company to gain MORE IT budget dollars at the Pentagon,” the analysts said. 

They added that many of Palantir’s contracts are considered high-priority and unlikely to be affected.

Additionally, Wedbush highlighted that “stepped-up AI investments now being seen under the Trump Administration with Project Stargate should benefit Palantir.” 

The firm emphasized that Palantir is at the center of a “tidal wave of federal spending on AI.”

Wedbush reiterated its Outperform rating on Palantir with a $120 price target, stating, “We believe Palantir could be a trillion market cap over the coming years and shaping up to be the next Oracle (NYSE:ORCL) or Salesforce (NYSE:CRM) as the AI Revolution plays out.”

Related Articles

Current Beltway/DOGE climate will benefit Palantir: analyst

PwC collaborates with Saudi Arabia to restore relations

Tether appoints new CFO to lead full financial audit