Palantir Technologies (PLTR, Financials) slipped 3% Monday amid a broader market pullback triggered by Moody's downgrade of the U.S. government's credit rating.

Palantir shares have surged nearly 66% in 2025, despite Monday's decline. The stock reached a record high last week, supported by optimism around easing global trade tensions and strong demand for AI applications.The company recently reported better-than-expected quarterly revenue and raised its full-year guidance, reinforcing bullish sentiment. Analysts at Bank of America described Palantir as a market definer in artificial intelligence. They highlighted its recent contract with NATO as a sign of the firm's edge in delivering enterprise-grade AI solutions, even amid pressure to select European vendors.Moody's cited persistent, large fiscal deficits in its downgrade, dragging down risk assets across the board. Still, Palantir's stock performance and momentum from strategic defense deals suggest continued investor confidence.Investors will be watching for execution on government contracts and any further upside revisions to guidance in the second half of 2025.

This article first appeared on GuruFocus.