Palantir Stock Rises on Iran Conflict—But Here’s the Real Story

Palantir Technologies Inc. (NASDAQ: PLTR) stock was up over 5% in intraday trading on Monday, March 2. The rally was caused by the initiation of military action by the United States and Israel against Iran. It may be an enticing trade, but remember that what goes up quickly can move lower just as fast.

For example, PLTR stock made a similar upward move when the United States launched a raid on Venezuela in January. But the stock quickly pulled back, down to around $130 just one week before the conflict with Iran commenced.

For traders with a shorter time horizon, that backdrop creates a tricky setup.

A series of event-driven spikes, followed by quick reversals, makes it tempting to treat Palantir as a pure proxy for geopolitical risk rather than a business that is compounding underlying value. 

That approach can work if you’re strict about timing your entries and exits, but it also raises the risk of getting whipsawed if headlines shift or the news is already priced in by the time you react.

For long-term investors, the lesson is different: don’t confuse headline-driven volatility with the company’s underlying progress. Separating short-term noise from the business’s fundamentals is one reason Palantir can still make sense as a long-term holding.

Palantir and GE Aerospace Land DoD Partnership for J85 Engine Support

Prior to the onset of hostilities, there was more news to bolster the buy-and-hold case for PLTR stock. That was the announcement that Palantir and GE Aerospace (NYSE: GE) had entered into a partnership for a contract with the U.S. Department of Defense (DoD).

The partnership deals with the J85 engines, manufactured by GE Aerospace, that power T-38 training jets. The contract with the Defense Logistics Agency is for seven months with the potential for a four-year extension.

Specifically, GE Aerospace is working with Palantir to use AI and data analytics to predict when parts will be needed, to detect supply chain issues early, and to speed up decision-making. Prior to the announced partnership, the two companies conducted a test on over 6,000 J85 parts, which showed improved visibility and fewer delays.

The Contract Highlights the Totality of Palantir’s Business

Cue the critics who will say that this is further evidence of Palantir’s reliance on government contracts. The argument is short-sighted for two reasons. It’s true that Palantir generates about 55% of its revenue from government contracts. However, “the government” constitutes more than a single client, such as the DoD. That means that a contract like the one with GE Aerospace is additive to future growth.

More significantly, the contract has the potential to bleed over into the company’s commercial business. That’s not a guarantee, but GE Aerospace is using Palantir’s software for applications that have obvious crossovers into commercial aviation.

In Palantir’s most recent earnings report, the company said U.S. commercial revenue rose 109% year-over-year (YOY) in full-year 2025. In Q4 2025, U.S. commercial revenue increased 137% YOY versus Q4 2024.

The takeaway is that Palantir, among technology stocks, has become an unquestioned leader in AI decisioning software that is being used to automate and improve the decision-making process. It also means the company has established credibility in both the public and the private sector.

Analysts Have Turned Bullish

There are two schools of thought regarding Palantir’s valuation. One is that the stock price has to drop to justify its current valuation. The other is that it’s going to grow into that valuation. Recent analyst sentiment suggests that, prior to the military action against Iran, analysts were focusing more on the latter than the former.

The Palantir analyst forecasts on MarketBeat show that at least nine analysts upgraded PLTR stock in the month of February. The lowest of the price targets associated with those upgrades was $150, still a 12% increase from PLTR's close on Feb. 27.

Further support for the bull case can be found in institutional ownership. Institutions own just 45% of the float; however, inflows exceed outflows about 3:1.

How to Approach PLTR Stock

From a technical perspective, the weekly chart suggests that the move in PLTR stock is not happening in a vacuum. Prior to the latest headline-driven spike, the last few weekly candles were already showing signs of stabilization after the recent pullback, with buyers stepping in to defend the area around the rising 50-week simple moving average near the mid‑$150s.

That kind of behavior often marks the early stages of a trend resumption rather than a one-off relief rally. Volume has also begun to tick higher on up weeks, which indicates that institutions may be accumulating on weakness rather than distributing into strength.

The one missing ingredient is a confirmed shift in momentum, as the weekly MACD remains negative and has yet to cross above its signal line; until that happens, investors should respect the possibility of further volatility, even if the broader setup is starting to lean back in favor of the bulls.