TLDR:
- Palantir stock surged 6.9% on Thursday, outpacing broader market gains
- Company announced strategic partnership with Google Cloud for FedStart platform
- Partnership aims to enhance AI solutions for U.S. government agencies
- Palantir stock is up 42.5% in 2025 despite being down 13.5% from its peak
- The company continues to face valuation concerns with P/E ratio near 570
Palantir Technologies’ stock saw a substantial jump on Thursday as the company revealed a new partnership with Google Cloud. The data analytics firm, known for its government contracts and artificial intelligence solutions, caught investors’ attention with this strategic move.
The stock gained 6.9% during Thursday’s trading session, closing higher than both the S&P 500 and Nasdaq Composite, which rose 2% and 2.7% respectively.
Palantir’s shares have now climbed 42.5% year-to-date in 2025. However, the stock remains 13.5% below its recent high point.
Google Cloud Partnership Boosts Federal Offerings
The main catalyst for Thursday’s stock movement was Palantir’s announcement of a strategic partnership with Google Cloud. This collaboration will integrate Google’s cloud services into Palantir’s FedStart platform.
FedStart is Palantir’s initiative designed to streamline software deployment for government entities. It helps technology companies and startups offer their software solutions to the federal government more efficiently.
The partnership combines Google’s robust cloud infrastructure with Palantir’s expertise and compliance know-how. This integration aims to deliver advanced AI solutions specifically to U.S. government agencies.
Investors reacted positively to this news, seeing potential for Palantir to win more and larger government contracts. These contracts are central to Palantir’s business model.
The partnership should help Palantir’s platform scale more effectively. It will also provide a more complete ecosystem for the company’s government clients.
Trade Discussions Add Market Optimism
Thursday’s gains also came against a backdrop of reports suggesting the U.S. is prioritizing trade negotiations with major partners.
The Trump administration has indicated that trade talks are underway. This comes despite comments from Chinese officials suggesting meaningful discussions aren’t currently happening.
Other reports suggest the U.S. and India may have reached foundational terms for a bilateral trade deal. This general market optimism helped lift tech stocks, including Palantir.
Valuation Concerns Persist
Despite the positive market reaction, Palantir continues to face questions about its valuation. The stock trades at a price-to-earnings ratio of nearly 570, which many analysts consider extremely high.
Even after a 15% decline from its peak a few months ago, Palantir shares maintain what some call “untenable valuation multiples.”
The company is valued at approximately 194 times this year’s expected earnings and 97 times expected sales. These metrics make the stock look expensive even considering Palantir’s strong recent performance.
The bull case for Palantir hinges on its long-term growth potential in AI services. Supporters believe the company has made the right bets on software for operating-system-level integration of AI technologies.
Recent contract wins make it difficult to argue against Palantir’s strategy and execution. However, investors should understand that the current valuation comes with downside risk.
Investors without high tolerance for risk and volatility might want to be cautious about Palantir stock at current levels. The company must maintain near-perfect execution to justify such premium pricing.
There’s no doubt that Palantir is operating at a high level, and the new Google Cloud partnership could help it win more business. The next few quarters will be crucial in determining whether the company can grow into its valuation.
