Palantir Technologies (PLTR) saw its shares slide roughly 5.4% to $144.41 in Thursday morning trading, as a newly announced $300 million contract with the U.S. Department of Agriculture failed to offset a broader downturn in software stocks. The decline came amid a sector-wide retreat following earnings reports from IBM (IBM) and ServiceNow (NOW) that reignited concerns about artificial intelligence disrupting legacy software players.
USDA Contract Details
The U.S. Department of Agriculture on Wednesday disclosed a blanket purchase agreement with Palantir valued at up to $300 million. The agreement establishes a framework for recurring orders as part of the USDA's initiative to modernize services for American farmers under the National Farm Security Action Plan. Blanket purchase agreements are standard federal procurement tools designed to streamline repeated purchases of goods or services.
The contract supports the USDA's "One Farmer, One File" program, which aims to give producers a single, unified record across multiple agencies, reducing redundant paperwork. The modernization push began in 2025 and is expected to continue through 2028, the USDA said in February.
USDA Chief Information Officer Sam Berry framed the initiative as both a technological upgrade and a matter of national security, stating, "Protecting America's farmland is protecting America itself." Palantir's federal engineering lead Ali Monfre added that the USDA is "moving fast" to deliver enhanced tools to farmers.
Palantir's Role
Palantir noted that its Landmark platform is already in use for self-service acreage reporting and digital enrollment in aid programs. The platform was also part of the $11 billion Farmer Bridge Assistance program rollout earlier this year.
The USDA deal is the latest in a string of government wins for Palantir. In March, Reuters reported that the Pentagon was moving to designate Palantir's Maven Smart System as a formal program of record, a status that locks in potential funding and deepens Palantir's integration into core U.S. defense software.
Market Context
Despite the contract news, Palantir shares moved in lockstep with the broader software sector on Thursday. IBM and ServiceNow both dropped after their earnings reports, while Adobe (ADBE) also slid, as investors fretted that new AI offerings could pressure traditional software vendors. UBS strategist Kiran Ganesh warned of "a lot bigger range of outcomes" now facing the technology sector.
Palantir's market capitalization stands at roughly $371 billion, making it highly sensitive to sentiment shifts in the software space. The company's first-quarter earnings are due on May 4, and investors are eager for evidence that new federal contracts can sustain its growth trajectory—and justify its premium valuation.
Financial Outlook
In February, Palantir reported fourth-quarter revenue of $1.407 billion, up 70% year-over-year, and issued 2026 revenue guidance of $7.182 billion to $7.198 billion, representing roughly 61% growth from the prior year. However, meeting those ambitious targets will be challenging.
The risks are significant. Palantir trades at over 340 times trailing earnings, and regulatory filings indicate that many of its contracts are flexible or can be canceled without penalty. If the May 4 earnings report disappoints, or if the software selloff continues, even another major contract win may not be enough to stabilize the stock.
