In This Article:
Key Points
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President Trump announced that a trade deal has been reached with the U.K.
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This marks the first deal of its kind after Trump announced sweeping tariffs in April.
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Though the details were light, some of the language in the announcement indicates Palantir could benefit specifically.
Shares of Palantir Technologies (NASDAQ: PLTR) are surging on Thursday. The artificial intelligence (AI)-powered data analytics company's stock gained 8.1% as of 1 p.m. ET and was up as much as 9% earlier in the day. The jump comes as the S&P 500 (SNPINDEX: ^GSPC) gained 1.5% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) rose 2%.
The government-focused software provider is rallying after President Trump announced a trade agreement with the United Kingdom.
Investors are hoping it's the first deal of many
Palantir shares climbed as President Donald Trump unveiled the broad outline of a trade agreement with the United Kingdom. This is the first major deal his administration has been able to put together after Trump imposed sweeping tariffs in April.
While optimism was high following the announcement, it's important to note that many specifics remain unclear, and nothing was formally signed. "The final details are being written up," Trump said. "In the coming weeks, we'll have it all very conclusive."
A boost for Palantir
While the news boosted stocks across the market, Palantir investors appeared especially optimistic, as some of the limited specifics mentioned could benefit the company specifically. The White House fact sheet released as part of the announcement mentions the deal will "close loopholes and increase U.S. firms' competitiveness in the U.K.'s procurement market." This could mean Palantir has an easier time winning new contracts with the U.K. government.
Palantir is still overvalued
With a price-to-earnings ratio (P/E) of nearly 500, Palantir's valuation is out of touch with reality. There is no doubt that the company is executing at a very high level, but with a valuation this high, a level of perfection is required that I don't think is possible to sustain long term. I would stay away from Palantir stock.
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