Palantir's stock price surges on AI news, gamma squeeze

It's becoming increasingly difficult to find websites that don't integrate an artificial intelligence chatbot. You open a site, and here is “Kira” (or whatever name you've chosen) asking you how she should address you.

Personally, I find that to be very annoying. But that is the trend. Apparently, your company isn't serious enough or big enough if it doesn't have one.

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Companies pushing AI just for the sake of having it is silly, but there are legitimate uses where AI doesn't end up just being a nuisance.

Banks, pharmaceutical companies, retailers, and the U.S. military all use AI, and hopefully, most of them do it better than UnitedHealthcare. Seemingly every company is working on AI chatbots or agentic AI programs that simplify processes (and could replace human jobs).

That's been a boon for AI stocks, including Palantir, which has seen its stock price soar 74% in 2025, including a 8% jump on May 30.

Palantir's CEO Alex Karp is riding a wave of AI chatbot and agentic AI research and development.

Image source: Kevin Dietsch/Getty Images

Fannie Mae partners with Palantir on AI fraud detection

Fannie Mae has more than $4.3 trillion in assets and plays a foundational role in the U.S. housing market. According to the company, it is the country's largest holder of residential mortgage debt outstanding, owning or guaranteeing an estimated one in four single-family mortgages and 20 percent of multifamily mortgages in the U.S.

On May 28, the company announced the launch of its AI-powered crime detection unit in partnership with Palantir.

The deal expands Fannie Mae’s fraud detection capabilities with a new AI-enabled platform that the company believes will help detect and prevent mortgage fraud, potentially saving the U.S. housing market millions of dollars in future losses.

“This partnership with Fannie Mae will set off a revolution in how we combat mortgage fraud in this country,” said Alex Karp, co-founder and chief executive officer of Palantir. “We are bringing the fight directly to anyone who attempts to defraud our mortgage system and exploit hardworking Americans.”

But this deal wasn't the only reason behind Palantir's stock price jumping.

Trump administration shares data across agencies

In March, President Trump signed an executive order calling for the federal government to share data across agencies.

In the past few months, Palantir has been granted more work across the federal government, a signal that it may benefit from that order.

The use of Palantir isn't surprising. Palantir's roots trace back to developing solutions to secure sensitive government data, and the US government remains a significant driver of the company's revenue.

In Q1, governments, including the U.S., contributed $373 million to the company's $884 million in sales. Palantir's government revenue was up 45% year over year in the quarter.

Much of that growth is due to the demand for Palantir's Foundry, a data analytics platform, and its AIP (Artificial Intelligence Platform), which enables clients to use AI, including large language models (LLMs) and AI agents, within private networks.

More Palantir

In May, the Department of Health and Human Services selected Palantir for its 5-year “Solutioning with Holistic Analytics Restructured for the Enterprise (SHARE)” blanket Purchase Agreement (BPA), valued at $90 million.

The New York Times reported this week that Palantir is negotiating with at least two other agencies — the Social Security Administration and the Internal Revenue Service — about buying its technology.

Meanwhile, TheStreet's Samuel O'Brient reports the Pentagon is significantly increasing the budget for Palantir’s Maven Smart System to $1.3 billion over the next four years, a roughly $795 million increase.

The prospect of additional Federal deals has emboldened investors.

Retail investors and traders “are buying massive amounts” of call options, said longtime investor Don Kaufman during a recent appearance on Schwab Network, reported the InsiderMonkey.

The jump in call activity is causing a ‘gamma squeeze,' forcing market makers to buy the underlying shares in Palantir as protection to hedge their risk.