Palantir Technologies (NASDAQ:PLTR) and Anduril Industries are facing scrutiny after an internal U.S. Army memo flagged “fundamental security” flaws in the modernization of the battlefield communications network they are helping to build, Reuters reported on Friday.
The Army’s chief technology officer warned in September that the prototype of the Next Generation Command and Control (NGC2) platform should be considered “very high risk” because adversaries could potentially gain “persistent undetectable access.”
The platform, developed by Anduril under a $100 million contract with support from Palantir, Microsoft (NASDAQ:MSFT), and smaller defense contractors, is designed to connect soldiers, sensors, vehicles, and commanders with real-time data.
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Palantir and Anduril, both led by Trump allies who have pushed into the Pentagon’s procurement ecosystem by promising faster, cheaper, and more advanced technology than legacy arms suppliers, declined to comment.
Benzinga contacted Palantir’s investor relations for comment on the report and is awaiting a response.
A December 2024 report indicated Palantir and Anduril Industries are leading a new consortium, challenging traditional defense contractors’ control over the $850 billion defense budget. The coalition held talks with SpaceX, OpenAI, Saronic, and Scale AI.
Palantir’s AI platform is already being integrated with Anduril’s Lattice autonomous software for defense applications.
The market has rewarded Palantir’s expansion: shares are up more than 135% year-to-date, lifting its market value above $441 billion, surpassing Lockheed Martin (NYSE:LMT). Analysts point to accelerating revenue and robust margins as key drivers.
In June 2025, Piper Sandler analyst Brent Bracelin initiated coverage of Palantir, calling it an “AI All-Star” and a long-term leader in artificial intelligence.
He highlighted the company’s rebound from late-2022 lows near $6 per share to a roughly $4 billion revenue run rate, with free cash flow margins exceeding 40%.
Bracelin argued that Palantir’s scale in two trillion-dollar markets could support $24 billion in annual revenue by 2032, recommending buying on dips.
Momentum has drawn public attention as well. In July, CNBC’s Jim Cramer projected Palantir could reach $200 after the stock broke $150 and briefly touched a record $160.39.
He described the surge as moving “like a knife through butter” and cited the $100 million U.S. Army contract with Anduril as a catalyst that could add over $150 million in recurring revenue over three years.
Price Action: PLTR shares were trading lower by 4.79% to $178.10 at last check Friday.
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