12:45 PM EST, 02/20/2025 (MT Newswires) -- Palantir Technologies ( PLTR ) stock was pressured by the Trump administration announcement to cut defense spending, but Palantir's ( PLTR ) software offerings could benefit from the move," Wedbush said Thursday.

Analysts, including Daniel Ives, said Palantir ( PLTR ) critics, who have been skeptical of the stock's rise, are now using these budget cuts as a new bearish approach, causing a sharp selloff when the news broke. However, the brokerage expects these cuts to actually benefit Palantir ( PLTR ). The company's "unique software approach" may help it secure more IT contracts from the Pentagon, not less.

The analysts added that the increased artificial intelligence investments under the Trump Administration should benefit Palantir ( PLTR ) as more organizations adopt AI infrastructure. The company is in a positioned to take advantage of the growing federal spending on AI. It has received FedRAMP high certification for its cloud services, allowing it to sell products across the entire US government.

"We believe Palantir ( PLTR ) could be a trillion market cap over the coming years and shaping up to be the next Oracle or Salesforce as the AI Revolution plays out...we view this latest worry as noise given where we see Palantir's ( PLTR ) bright AI-driven future," according to the note.

Wedbush kept its outperform rating and $120 price target. Palantir ( PLTR ) shares fell 10% in recent trading.

Price: 100.72, Change: -11.35, Percent Change: -10.12