Palantir’s AI Tailwind Meets a Proxy Showdown Over Defence Business

The rally in artificial intelligence software stocks is proving more than a fleeting mood swing. Palantir Technologies jumped 9.21 percent to $156.54 in New York on Friday, with the euro equivalent closing at €134.18, as fresh evidence of surging enterprise AI spending swept through the sector. The gains trimmed the year-to-date decline to 6.23 percent, but the real test lies not in the market’s optimism — it lands on the shareholder ballot on Wednesday.

A Partner’s Record Quarter Turned the Tide

The immediate catalyst came from outside Palantir’s own walls. Dell Technologies reported a first-quarter server revenue haul of $16.13 billion for its fiscal 2027, a staggering 757 percent jump from a year earlier, with AI-related orders during the quarter reaching $24.4 billion. Dell raised its full-year forecast to around $60 billion. The two companies had deepened their partnership at the Dell Technologies World conference in May, integrating Palantir’s Foundry and AIP platforms into the Dell AI Factory alongside Nvidia hardware. For investors, Dell’s numbers served as a live proxy for the strength of Palantir’s pipeline.

The broader sector confirmed the pattern. Snowflake, another Palantir partner, posted a 33 percent revenue gain to $1.39 billion and lifted its annual outlook. More than 13,600 clients now use its AI tools. The combined performance challenges what some analysts dub the “AI ghost trade” — the idea that capital is flowing only into infrastructure layers, not software applications. Gartner’s forecast for 2026 predicts global AI software spending will leap roughly 60 percent to about $453 billion.

Palantir’s Own Numbers Back the Story

The company’s own quarterly report, released in May, already showed momentum running hot. First-quarter revenue hit $1.633 billion, up 85 percent year-on-year, with the US segment generating $1.282 billion — a 104 percent increase. The US commercial business accelerated even faster, rising 133 percent to $595 million. Operating cash flow reached $899 million, while adjusted free cash flow stood at $925 million. Management lifted its full-year guidance to a range of $7.650–$7.662 billion, with US commercial revenue expected to exceed $3.224 billion, representing at least 120 percent growth.

Should investors sell immediately? Or is it worth buying Palantir?

Despite the fundamental strength, the stock remains technically stretched. The relative strength index hit 89.9, signaling an overheated short-term picture. The share price sits 10.40 percent above its 50-day moving average but still 3.02 percent below the 200-day line. Over the past week, the gain totals 13.75 percent, and over the month, 13.56 percent — a rapid run that leaves little room for error.

A Governance Test at the Annual Meeting

On Wednesday, June 3, Palantir will hold its virtual annual meeting at 4 p.m. German time. The agenda includes standard items: election of seven directors, ratification of Ernst & Young as auditor, and an advisory vote on executive compensation. But two shareholder proposals have drawn fire.

One resolution demands an independent due diligence report on the use of defence-related products in conflict zones and high-risk regions. A second calls for a human rights impact analysis of Palantir’s products and services, both actual and potential. The board recommends voting against both, arguing the proposals rest on misunderstandings of the business. Palantir insists it is not a data company or a surveillance firm; it does not sell personal data or offer data analysis as a service. Instead, it describes itself as a provider of software platforms that allow clients to integrate and analyse their own data.

A coalition of institutional and faith-based investors is urging shareholders to support Proposal 5, which specifically requests a report on the implementation of human rights policies in conflict areas. The pressure has been building: New York’s comptroller in February called for an independent human rights audit of Palantir’s work with the Department of Homeland Security and ICE, and the Dutch pension fund ABP has already divested.

Palantir at a turning point? This analysis reveals what investors need to know now.

What Comes Next

Beyond the governance debate, macro data will test the stock’s valuation. The ISM manufacturing index lands on June 1, the services PMI on June 3, and the May jobs report on June 5 — all capable of shifting risk appetite and interest rate expectations for a high-multiple growth name like Palantir.

The second-quarter earnings are due on August 3. The current rally has lifted the stock roughly 25 percent below its 52-week high of near €180, and the sustainability of the move will depend on whether buyers hold after the Dell-induced pop. Wednesday’s vote will provide the first real gauge of sentiment — and the headlines that follow.

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