Peter Thiel’s Palantir has struggled to win contracts since Trump left White House

Peter Thiel may have more than just ideological reasons for backing Republicans in the midterm elections.

The Silicon Valley billionaire — who has bankrolled the US Senate campaigns of Ohio Republican JD Vance and Arizona’s Blake Masters — is also chairman of Palantir, a secretive software firm that has won fewer and smaller contracts with the US government since Joe Biden became president.

On Monday, Palantir shares tumbled 11% to $7.02 after the company posted a loss of 6 cents a share, with adjusted earnings missing Wall Street’s expectations. Asked by a Wall Street analyst about the company’s outlook on government contracts in the coming months, CEO Alex Karp sounded less than inspirational.

“We tend to have kind of lumpy growth and flatness, which no one likes,” Karp said on a Monday conference call. “You don’t like it. We don’t like it.”

While Karp was more upbeat on the longer-term outlook, some analysts say Palantir may be having trouble in the meantime partly because Thiel — who famously organized an awkward summit in 2016 between President Donald Trump and tech bigwigs like Jeff Bezos, Elon Musk, Larry Page and Tim Cook — has lately faced less-friendly faces in Washington, sources said.

“There is no question they had more friends and allies in the prior administration,” Citigroup analyst Tyler Radke told The Post. “There are probably some headwinds from a newer administration.”

On Monday, Palantir told investors it expects fourth-quarter revenue of $504 million — slightly short of its previous outlook for $507 million. That disappointed some investors, who had expected a boost from “a flurry of US Army contracts,” William Blair analyst Kamil Mielczarek said in a note to investors.

“It appears that these wins are not sufficient to offset potential churn” — as revenue from other, expiring government contracts dries up, the analyst added.

Some of the declines come from software contracts to manage COVID vaccine databases that are no longer needed, Radke said. In the last few months, the Division of Homeland Security increased its Palantir contract for 2023 by 26%, but Palantir’s IRS contract will be down 30% and the US Department of Health and Human Services is down 30%, Radke estimates.

“When you saw their big growth, it was helped by the contracts they signed under the Trump administration,” Radke said. “It feels like they just struggled to keep some of the business from the prior administration.”

Elsewhere, Palantir has been doing work for the US government in Ukraine for free despite expectations it would be paid, according to the analyst.

There is some hope that regardless of a change in the ruling political party, conditions could improve for Palantir. The Central Intelligence Agency, the Pentagon and the National Security Agency have been allocated $43 billion for cloud programs that has not yet been spent, a source who works with Palantir said.

“I thought these new clouds would be up and running this year. It is maddening,” the source said. “Each one of these clouds needs Salesforce and Palantir.”

Meanwhile, Palantir’s share price has steadily dropped since it hit an all-time high of $35.18 in late January 2021, shortly after Biden took office.

Thiel is going all in on the midterm elections. He is the ninth-biggest mega-donor this election cycle, making $30 million in large donations, according to an Oct. 24 Washington Post list.

Thiel, who made his initial fortune co-founding PayPal, is focusing squarely on getting Ohio’s Vance and Arizona’s Masters elected to the US Senate. Both Vance and Masters are former Thiel employees and raised money by offering dinners with Thiel.