Prediction: Palantir Stock Will Soar if Trump's One, Big, Beautiful Bill Passes Congress

Packaging is important. Consumer products companies know it. So do politicians. That's why the GOP named the H.R. 1 bill making its way through Congress the "One Big Beautiful Bill Act." The moniker originated from a social media post by President Donald Trump promoting "one big beautiful bill" to include all of his domestic policies.

As the old saying goes, beauty is in the eye of the beholder. Not everyone will agree with the Republican priorities in the legislation, but the bill passed by the House and headed to the Senate is definitely big, at 1,082 pages.

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Congressional legislation often creates big winners, and I predict that Palantir Technologies (NASDAQ: PLTR) will soar if Trump's One, Big, Beautiful Bill passes Congress.

Image source: Getty Images.

Golden on the inside

To understand the rationale behind my prediction, we need to first examine what's in the bill. And there's a lot.

The GOP wants to make the individual tax cuts passed during the first Trump administration permanent. Republicans also seek to provide tax breaks for overtime and tips, pledges made by Trump during his latest presidential campaign. They want to put work requirements in place for some Medicaid and food assistance recipients. The legislation includes funding for deportations. It would establish a new "money accounts for growth and advancement" program for babies born between Jan. 1, 2024, and Dec. 31, 2028.

Those are just a few of the components in the bill, but the most important one related to my prediction is $25 billion in funding for the president's "Golden Dome for America" plan. The Golden Dome is a missile defense shield that's intended to intercept missiles launched from anywhere in the world, or even from space.

The $25 billion included in the One, Big, Beautiful Bill is just a start. The total cost for the Golden Dome system is estimated to be in the ballpark of $175 billion. Trump wants to have the missile defense system in place before he leaves office in January 2029.

Why Palantir stock could soar

How might this impact Palantir Technologies? Well, Reuters recently reported that the company is among a handful of front-runners well-positioned to secure major deals to help build the Golden Dome system.

While Elon Musk's SpaceX appears to be in the running to be a primary contractor -- the space technology company already works closely with the federal government, especially the Department of Defense and NASA -- sources told Reuters that SpaceX plans to team up with Palantir and autonomous drone maker Anduril.

It's uncertain at this point whether SpaceX, Palantir, and Anduril will win contracts to develop the Golden Dome missile defense system, if it comes into being. We also don't know how much money each company might stand to receive if they do secure contracts with the federal government.

However, I don't think that will matter to many investors if the One, Big,Beautiful Bill passes in both the House and Senate and Trump signs it into law. Palantir stock is already up almost sixfold over the last 12 months. Shares of the data analytics software company have skyrocketed 1,470% over the last three years.

When a stock is on a roll like Palantir, it doesn't take much to get investors even more excited. Should the GOP legislation sail through both chambers of Congress, I think the chances of Palantir stock soaring even more will increase significantly.

The not-so-beautiful issue with Palantir

Trump's bill could be beautiful for investors who buy Palantir stock. However, there's an issue with Palantir that's not so beautiful: Its valuation.

The software maker's shares trade at a forward price-to-earnings ratio of 227. Is this nosebleed multiple supported by Palantir's growth? I don't think so.

Sure, Palantir's revenue jumped 39% year over year in its latest quarter, with earnings more than doubling. But this growth rate is slowing. Palantir's guidance projects revenue will increase around 36% this year. The consensus Wall Street estimate is for revenue growth of 28.7% in 2026.

Perhaps the Golden Dome project could boost Palantir's growth significantly. My prediction that Palantir stock will soar hinges on the passage of the One Big Beautiful Bill Act with the $25 billion in initial funding for the missile defense system. However, the legislation will face stiff opposition from Democrats and conservative Republicans concerned about its spending increases, so it's not clear what will happen.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.