The 2026 midterm results are in, and the Democrats won in a landslide. So what does this mean for Palantir Technologies (NASDAQ:PLTR) stock? Maybe nothing good, but also maybe… nothing.
Shares of the artificial intelligence and defense contractor sold off more than 6% in early trading, before paring their losses to just 1% as of 11:15 a.m. ET Wednesday. And yet, Wall Street’s reaction to the sea change in government seems muted — or even positive in Palantir’s case.
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Bad news for defense contractors?
President Donald Trump had requested $1.5 trillion for fiscal year 2027 defense spending in the months leading up to November’s election. A Democratic Congress may not approve anything like that.
At last report, the U.S. Senate will number 54 Democrat votes to just 44 Republicans, and the House of Representatives is tilting blue 228-139 (with 68 seats unconfirmed). Even before the results are all in, Politico reports the Pentagon plans to reduce its spending request from $1.5 trillion to $1.1 trillion. With more than half its revenue coming from government contracts, many military, this could be bad news for Palantir.
What’s next for Palantir stock
And yet, Wall Street seems unconcerned. This morning, Barclays analyst Anthony Valentini raised his target price on Palantir to $273 with an overweight rating, reports StreetInsider.com. Bank of America‘s Mariana Perez Mora reiterated her buy rating on Palantir, too, with a $255 price target implying 47% upside.
Why? “Palantir can no longer be viewed only as a government services/software provider with its commercial growth engine running hot,” says Mora. While its government sales grew 78% year-to-date, Palantir’s commercial sales year-to-date roughly doubled.
Assuming it can pivot to emphasize its commercial business and keep growing at this rate, Palantir stock should do just fine.
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