AI software firm Palantir (PLTR) saw its stock drop on Friday after a Reuters report claimed that there were serious problems with a U.S. Army communications system involving Palantir and Anduril Industries. Indeed, the report focused on a September Army memo that criticized Anduril’s NGC2 system (short for Next Generation Command and Control), which includes Palantir and Microsoft (MSFT) as subcontractors. Palantir quickly responded by stating that the issues mentioned in the report were outdated and inaccurate.
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It also said that the Army had resolved the issues immediately and that no vulnerabilities were found in its own platform. Unsurprisingly, Lieutenant General Jeth Rey told Breaking Defense that discovering risks like these is a normal part of bringing in new technology, and emphasized that the issue was dealt with as soon as it was found.
Interestingly, the Army memo from September 5 warned that the system was vulnerable to insider threats, outside attacks, and accidental data leaks. It also pointed out major weaknesses in basic security procedures and oversight. Still, both Palantir and Anduril stated that the system is going through the usual steps of development: finding problems early, fixing them fast, and making sure it’s secure before it’s used in the field.
Is PLTR Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PLTR stock based on five Buys, 13 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PLTR price target of $157.33 per share implies 9.3% downside risk.
