Wedbush: Palantir (PLTR.US) is poised to secure more U.S. government contracts, maintaining its "Outperform" rating.

Wedbush Securities conducted a channel check in Washington, D.C. and is confident that palantir Technologies (PLTR.US) could win more deals and see increased US federal spending. The firm maintains a "Outperform" rating and a target price of $120 on the stock.The firm's analyst, Dan Ives, wrote in a report to clients: "Based on our conversations, there is a growing belief in Washington, D.C. that the efficiency focus of the DOGE plan could be a major breakthrough for companies like Palantir next year, as its unique software value proposition perfectly aligns with the broader Washington theme under Trump and Musk. In turn, we believe Palantir could actually get more deals and IT budgets across government agencies, ultimately further solidifying its position in the federal budget cycle in fiscal years 25 and 26."After US Defense Secretary Pete Hegseth released a memo requesting a 8% annual reduction in defense spending over the next five years, Palantir's stock price has fallen nearly a third in the past two weeks.However, Wedbush believes that given Palantir's focus on artificial intelligence, the strict spending environment will allow Palantir to gain a larger share of the defense spending pie.The analysts also added: "We also believe that Palantir is involved in many projects/contracts with the Department of Defense, which are secure and not at risk of being cut in the new spending environment, as they are high priority."