Palantir Technologies Inc. (NASDAQ:PLTR) stock stayed under pressure Friday as investors weighed fresh government contract controversies in the U.S. and U.K. against rising Treasury yields and mounting concerns over the software company’s premium valuation.

The latest disputes involving Pentagon bidding restrictions and a blocked London police contract added new scrutiny to Palantir’s government business at a time when higher interest rates continue to challenge richly valued AI and software stocks.

Pentagon Contract Dispute Adds Pressure

Palantir is reportedly challenging the Pentagon’s Defense Intelligence Agency over restrictions on bidding for a contract to modernize the agency’s data analytics system, according to a filing obtained by Axios.

The dispute adds another layer of uncertainty as investors continue monitoring Palantir’s government business and defense-contract pipeline.

London Police Palantir Contract Faces Setback

Palantir also hit resistance in the U.K. after London’s deputy mayor blocked the Metropolitan Police from signing a contract worth up to 50 million pounds with the company.

The proposed deal included a 25.3 million pound contract for 2026-27, alongside an optional 24.8 million pound extension, aimed at supporting criminal investigations and internal reform programs.

MOPAC Questions Procurement And Costs

The Mayor’s Office for Policing and Crime (MOPAC) said the Metropolitan Police failed to demonstrate value for money adequately and did not properly test alternative suppliers before pursuing the Palantir agreement, BBC News reported on Thursday.

Deputy Mayor for Policing and Crime Kaya Comer-Schwartz also said the Met breached procurement rules by failing to obtain required approval for its procurement strategy.

Ethics Debate Surrounds Palantir’s Public Contracts

City Hall officials separately raised broader concerns about whether public-sector procurement should take into account a company’s ethics and values. However, current U.K. procurement law does not allow contracts to be rejected solely on that basis.

Palantir has previously faced criticism over its work with U.S. Immigration and Customs Enforcement and the Israeli military.

Metropolitan Police Defends Technology Modernization

The Metropolitan Police criticized the decision, arguing that advanced software tools remain critical for improving efficiency and modernizing operations amid financial strain.

The force said the technology could help address a 125 million pound funding shortfall while improving operational performance as staffing levels decline.

Palantir Highlights Existing U.K. Law Enforcement Work

Palantir defended its role in British policing, noting that multiple police forces across the U.K. already use its software.

The company said its technology has supported Bedfordshire Police in identifying domestic violence risks under Clare’s Law and helped the Metropolitan Police investigate corruption and criminal activity within the force.

Macro Backdrop Continues To Pressure High-Growth Software Stocks

The broader macro environment also remains challenging for premium software names like Palantir. Treasury yields remained elevated, with the 10-year yield at 4.58% and the 2-year yield at 4.06%, while CME FedWatch showed markets pricing a 96.8% probability that the Federal Reserve will keep rates unchanged at its June meeting.

Palantir develops artificial intelligence, analytics, and automated decision-making software for government and commercial customers through its Gotham and Foundry platforms.

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the August 3, 2026 (estimated) earnings report.

  • EPS Estimate: 33 cents (Up from 16 cents YoY)
  • Revenue Estimate: $1.81 Billion (Up from $1.00 Billion YoY)
  • Valuation: P/E of 154.4x (Indicates premium valuation relative to peers)

Analyst Consensus & Recent Actions: The stock has a Buy rating and an average price forecast of $189.38 (high: $230.00; low: $90.00) from 27 analysts. Recent analyst moves include:

  • Rosenblatt: Buy (Maintains forecast to $225.00) (May 21)
  • Citigroup: Buy (Raises forecast to $225.00) (May 6)
  • Argus Research: Upgraded to Buy (Forecast $190.00) (May 6)

Palantir Price Action

PLTR Stock Price Activity: Palantir Technologies shares were up 0.05% at $137.48 during premarket trading on Friday, according to Benzinga Pro data.

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