Palantir Technologies (PLTR) has flagged the newly famous AI model by the Chinese start-up DeepSeek as risky for its clients. Ryan Taylor, Palantir’s Chief Revenue Officer, expressed disapproval of DeepSeek and believes that no U.S. government customer will be permitted to utilize DeepSeek’s technology. Taylor further mentioned that Palantir would also advise its commercial clients against adopting DeepSeek’s AI models. Notably, Palantir generated 40% of its Q4 sales from U.S. government contracts.
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Meanwhile, Palantir posted strong fourth-quarter results, surpassing analysts’ expectations. As a result, its stock surged by over 22% in after-hours trading on Monday.
DeepSeek Challenges U.S. Tech Giants in AI Race
Palantir’s caution comes just days after concerns were raised about the U.S.’s standing in the AI tech race. The recently launched DeepSeek R1 model has garnered significant attention for its impressive performance and affordable pricing. It is rapidly becoming a strong competitor to some of the most advanced AI language models on the market.
Palantir’s CEO, Alex Karp, recently highlighted the need for the U.S. to improve its AI technology to keep up with growing competition, especially from DeepSeek. While he praised the U.S. as having the best tech scene in the world, he acknowledged that DeepSeek’s rise has shaken up the industry.
Karp is also advocating for robust national security measures to protect U.S. innovation from foreign influence. In line with this, U.S. officials are currently assessing the national security risks associated with the DeepSeek app, as reported by White House press secretary Karoline Leavitt.
Palantir Projects Strong Revenue Growth for 2025
For the first quarter of 2025, Palantir expects revenue between $858 million and $862 million, surpassing the LSEG estimate of $799 million. For the full year, Palantir projects sales of $3.74 billion to $3.76 billion, above the average estimate of $3.52 billion.
Additionally, the company projects that its U.S. commercial sales will grow by at least 54%, reaching around $1.08 billion in 2025. In Q4 2024, its U.S. commercial revenue increased by 64% year-over-year, reaching $214 million.
Is Palantir Stock a Good Buy?
Overall, Wall Street has a Hold consensus rating on PLTR stock, based on two Buys, nine Holds, and six Sell recommendations. The average share price target for Palantir is $52.57, which implies a downside potential of 37.2% from current levels.
In the past 12 months, PLTR stock has skyrocketed by an impressive 400%.
