Time to Purchase the Dip in Palantir Inventory With These ETFs?

Palantir’s PLTR inventory plunged as a lot as 25% over the previous week following two main developments — CEO Alex Karp’s adoption of a brand new inventory buying and selling plan and reviews that the Pentagon has been directed to scale back the U.S. protection funds by 8% yearly for the following 5 years.

The corporate, popularly identified for its protection contracts and know-how providers, misplaced about 10.5% in its share worth on Feb. 24, 2025, and retreated about 3.3% after hours.

Karp’s Inventory Gross sales Plan

In a current regulatory submitting, Palantir disclosed that Karp’s new buying and selling plan would allow him to promote practically 10 million shares over the following six months.

Pentagon Funds Cuts Ordered

The Washington Put up reported recently that Protection Secretary Pete Hegseth has instructed senior Pentagon officers to draft a plan for vital protection funds cuts. The present funds, roughly $850 billion, is ready to be diminished by 8% per yr for the following 5 years, with a deadline for proposals set for Monday.

Palantir’s Market Place

Earlier than the current sharp decline, Palantir had been one of many strongest-performing U.S. shares over the previous two years, with its share worth nonetheless up practically 20% yr so far. The corporate has a market capitalization of over $212 billion and lately reported This fall revenues of $828 million, with adjusted earnings of 14 cents per share. Palantir trades at a lofty price-to-earnings ratio (trailing 12 months) of 247.20X, compared to the industry average of 12.92X.

Trump Administration’s Price-Slicing Efforts

Since his inauguration for a second, nonconsecutive time period on Jan. 20, President Donald Trump has pushed for appreciable reductions in authorities spending and federal workforce numbers. To spearhead this initiative, he appointed Tesla CEO Elon Musk to steer the newly established Division of Authorities Effectivity (DOGE).

Bullish Case for Palantir

The PLTR inventory has surged about 285% over the previous yr (as of Feb. 24, 2025). After such a monumental rise, the most recent decline may be thought of a wholesome correction. Palantir’s Synthetic Intelligence Platform (AIP) has gained widespread adoption, serving to companies combine giant language fashions into operations. AIP’s scalability and adaptableness have helped Palantir safe a significant number of deals worth more than $1 million.

Together with a authorities buyer base, Palantir is eyeing to broaden its publicity to business markets. Furthermore, Palantir and Anduril, two of the main U.S. protection know-how corporations, are in dialogue with round a dozen rivals to determine a consortium geared toward collectively bidding for U.S. authorities contracts. The consortium is prone to embrace Elon Musk’s SpaceX, ChatGPT maker OpenAI, autonomous-ship builder Saronic and synthetic intelligence knowledge group Scale AI, as quoted on Yahoo Finance.

Palantir-Heavy ETFs in Focus

Zacks Rank #2 (Purchase) Palantir’s inventory is high-growth in nature. The inventory comes from a top-ranked Zacks Technology Services Industry (top 33%). Even when the protection funds is diminished, Palantir’s large publicity to the federal government house is a key successful level within the funding rationale.

However then, the everyday worth goal of Wall Avenue analysts signifies that shares can fall additional.Word that primarily based on the short-term worth targets supplied by 17 analysts, the common worth goal for Palantir Applied sciences Inc. involves $81.82. The forecasts vary from a low of $18.00 to a excessive of $125.00. Palantir shares traded at $87.71 after hours on Feb. 24, 2025.

In opposition to this difficult state of affairs, buyers can trip out the positives of PLTR inventory with PLTR-heavy exchange-traded funds (ETFs) like ProShares Large Information Refiners ETF DAT, REX AI Fairness Premium Revenue ETF AIPI and Adaptiv Choose ETF ADPV. Word that ETF or the basket strategy minimizes the company-specific focus dangers (learn: Palantir vs. NVIDIA ETFs: Better AI Plays for 2025?).