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Palantir Stock Falls On Report Army Communications Network Flawed
  
Palantir Technologies ( PLTR) shares fell sharply Friday on a report that a prototype battlefield communications network being developed by the software maker and Anduril Industries has security problems. With Friday's retreat, Palantir stock has still gained over 128% in 2025.
The prototype battlefield communications network is rife with "fundamental security" problems and vulnerabilities, and should be treated as a "very high risk," according to a recent internal Army memo, said a Reuters report.
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?Palantir Is Shaking Up The Defense Sector. What Comes Next As The AI Revolution Heads To The Front Lines?
Palantir StockOn the stock market today, Palantir tumbled 7.5% to close at 173.07, knifing through the 21-day moving average. Palantir stock cleared a 185.75 cup-with-handle buy point on Thursday. But Friday's move triggered the 7%-8% sell rule for investors who bought that breakout.
Key Defense ContractsIn July, the Army awarded Anduril a $99.6 million contract with partners that include Palantir to develop the next phase of the Army's Next-Generation Command and Control (NGC2) platform prototype. Other Anduril partners include Striveworks, Govini, Instant Connect Enterprise, Research Innovations and Microsoft ( MSFT).
Meanwhile, Lockheed Martin in early September received a $26 million contract to develop a NGC2 prototype architecture. The Army is expected to approve more prototype projects.
One view is that NGC2 could serve as a foundational piece for a larger, integrated Space Dome data network. The "Golden Dome" air and missile defense shield is expected to cost $175 billion or more.
Further, Anduril is viewed as a new challenger to defense industry incumbents.
Also, Anduril has been developing pilotless fighter jets and other autonomous systems. It was founded by former Facebook executive Palmer Luckey and three former Palantir executives. Further, Elon Musk's SpaceX, Anduril and Palantir are collaborating on a satellite-based defense system proposal, according to reports.
The IBD Methodology: How To Invest In Stocks While Managing Risks
Palantir Stock Technical RatingsPalantir shares have pulled back from an all-time high of 190 on Aug. 12.
Palantir stock has boomed amid views that the company seems poised to win more U.S. government business during the Trump administration. Also, retail investor enthusiasm for generative artificial intelligence plays has lifted Palantir stock, although commercial-related revenue has yet to ramp up.
Meanwhile, Palantir stock holds a Composite Rating of 99 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Also, Palantir stock holds an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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