Palantir Technologies (PLTR) Shares Surge as Government Contracts Keep Rolling In

TLDR

Table of Contents

Palantir (PLTR) stock jumped 8% on May 30 following AI partnership news and government contract expansion
Fannie Mae partnered with Palantir to launch AI-powered mortgage fraud detection platform worth potentially millions in savings
Pentagon increased Palantir’s Maven Smart System budget to $1.3 billion over four years, up $795 million
Company secured over $113 million in federal contracts since Trump administration began, expanding across multiple agencies
Retail investors buying massive call options creating gamma squeeze, forcing market makers to purchase underlying shares

Palantir Technologies shares climbed 8% on May 30 as investors reacted to fresh AI partnership news and expanding government contracts. The data analytics company has seen its stock rise 74% in 2025.

The stock surge came after multiple catalysts hit the market simultaneously. Fannie Mae announced a new AI-powered fraud detection partnership with Palantir on May 28.

What once took @FannieMae 60 days to investigate, Palantir software achieved in seconds.
We are proud to partner with Fannie Mae to help support and secure the American Dream. pic.twitter.com/pMXSzoeESp
— Palantir (@PalantirTech) May 28, 2025

The mortgage giant holds more than $4.3 trillion in assets and backs roughly one in four single-family mortgages in the U.S. The AI platform aims to detect and prevent mortgage fraud across the housing market.

“This partnership with Fannie Mae will set off a revolution in how we combat mortgage fraud in this country,” said Alex Karp, Palantir’s CEO and co-founder. The executive stated the platform would target anyone attempting to defraud the mortgage system.

But the Fannie Mae deal wasn’t the only driver behind Friday’s stock jump. Government contract wins have been piling up for the company.

Federal Contracts Keep Growing

President Trump’s March executive order calling for data sharing across federal agencies has created new opportunities for Palantir. The company has secured over $113 million in federal contracts since the current administration took office.

The Pentagon recently boosted Palantir’s Maven Smart System budget to $1.3 billion over four years. This represents a $795 million increase from previous funding levels.

Government revenue already makes up a large chunk of Palantir’s business. In Q1, government clients contributed $373 million to the company’s $884 million in total sales.

That government revenue jumped 45% year-over-year in the first quarter. Much of the growth stems from demand for Palantir’s Foundry data analytics platform and its AIP artificial intelligence system.

The Department of Health and Human Services picked Palantir for a 5-year contract worth $90 million in May. The “SHARE” blanket purchase agreement expands the company’s health sector presence.

Two more agencies are reportedly in talks with Palantir about technology purchases. The New York Times reported the Social Security Administration and Internal Revenue Service are both negotiating deals.

Trading Activity Drives Additional Gains

The string of contract wins has excited retail investors and options traders. Longtime investor Don Kaufman told Schwab Network that traders “are buying massive amounts” of call options on Palantir stock.

This heavy call buying is creating what traders call a gamma squeeze. Market makers who sell the options must buy underlying Palantir shares to hedge their positions.

The hedging activity pushes the stock price higher as market makers purchase shares. This creates a feedback loop where rising prices attract more options buying.

Palantir’s Foundry platform currently serves four federal agencies under Trump’s data-sharing initiative. The platform organizes and analyzes large datasets from multiple sources.

Privacy experts have raised concerns about combining extensive government datasets. Some worry the merged information could target specific groups or political opponents.

Palantir maintains on its blog that it only processes data under client direction. The company says it doesn’t control how clients use the processed information.

The White House hasn’t detailed Palantir’s specific tasks under the executive order. Officials have emphasized the order’s goals of cutting costs and improving government efficiency.

Palantir’s expanding government business continues attracting investor interest despite ongoing privacy debates. The company’s stock remains up 74% year-to-date as federal contracts keep growing.

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