Maybe Tesla should be Palantir

If imitation is the sincerest form of flattery, Palantir CEO Alex Karp is probably blushing.

Meta has recently begun to dabble in the world of defense technology, a clear indication that Palantir’s surging share price is getting the attention of Silicon Valley’s elite.

And on Thursday, Morgan Stanley analyst Adam Jonas — a longtime Tesla watcher — seemed to be suggesting that Tesla CEO Elon Musk try to mimic Palantir, writing that the EV company could expand its product portfolio to include some sort of autonomous drone division. (Palantir has been involved in developing AI software for drones.)

The total addressable market of electronic vertical take-off and landing drones could hit $9 trillion by 2050, “far bigger than cars,” Jonas said.

Of the opportunity, he writes:

“TSLA’s skills transferability. Manufacturing, material science, navigation/autonomy, electric motor development, battery storage, supporting infrastructure and robotics… Tesla has a host of relevant skills to be a factor in the Low Altitude Economy from both a commercial and (potentially) non-commercial perspective.

Starlink the ‘connective tissue’ in the Low Altitude Economy. Anyone following the situation in Ukraine/Russia over the past 3 years understands the deterministic role of low latency, reliable, resilient/redundant satellite communications in the battlefield to conduct basic to sophisticated maneuvers and operations.

The DOGE Angle. While Elon Musk is no longer working directly with team DOGE, we suggest investors keep a watchful eye on incremental developments on actions and ‘suggestions’ that could prove influential to the reformation of US transportation.”

While Jones concedes that he has no information indicating that Tesla is pursuing an aviation division, his note is a reflection of the attention earned by Palantir, which sells a range of AI, intelligence, and data management software to both government and corporate clients. It’s the performance, stupid.

After last year’s 340% run-up, making it the top stock in the S&P 500, Palantir is up another 74% in 2025, neck and neck with NRG Energy for this year’s biggest gainer among the blue chips — thanks, in part, to a large and loyal base of retail shareholders.

But whether or not a Tesla turn to defense technology would connect with the market is an open question.

As we’ve written before, part of the reason that Palantir shares have exploded is the perception that the company’s connections with the Trump administration — influential right-wing political donor Peter Thiel is a cofounder and the largest individual shareholder in the company, with a stake worth roughly $9 billion — will translate to additional government contracts. The federal government is Palantir’s biggest single customer.

And while Musk has been arguably closer to President Trump himself in the early going of Trump 2.0, that relationship seems to be going off the rails quickly.