So far, 2025 has been all about tariffs. The major stock market indexes -- the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average -- have fallen 6%, 10%, and 5%, respectively, this year as markets worked overtime to keep up with the latest tariff headlines.

Yet, while the Trump administration's tariff policies introduced a new level of uncertainty to the market, it's unclear whether tariffs will impact all areas of the market.

Let's look at one of the leaders in the artificial intelligence (AI) sector, Palantir Technologies (PLTR 1.22%), to see whether this high-flying stock can continue to soar in the face of tariffs.

Image source: Getty Images.

What are tariffs?

To begin, we must understand what tariffs are and how they work. A tariff is defined as a tax or duty levied by a government or supranational government on imported or exported goods.

Tariffs are collected when goods cross the border. More often than not, fee collection occurs in imported goods rather than exports. What's more, tariffs are frequently categorized. That means that some goods like food or automobiles might be subject to different rates of tariffs -- or no tariffs at all.

In addition, tariffs are country-specific, meaning that imported goods from one country could be subject to a different rate than similar goods from another.

Finally, as has been clear over the past few weeks, tariffs are subject to change. Each country has its own mechanism for adding, removing, or altering tariffs, which means the overall global trade landscape can change quickly, and with little or no warning.

Can Palantir Technologies thrive in a world filled with tariffs?

To put it simply: Yes, Palantir's prospects remain solid, despite the current trade uncertainty. Here's why.

Tariffs have been around for a very long time. Because of that, they're designed to work with physical goods: clothing, toys, machinery, etc. These items are physically transported by land, air, and sea, then physically moved through a border crossing.

For companies that rely on imported goods, it's easy to appreciate how increased tariffs might narrow profit margins. The higher prices they pay to acquire their goods will either have to be passed on to their customers or absorbed by the company.

However, what about companies like Palantir that provide technology services? Are they impacted by tariffs?

The answer is yes, albeit indirectly. Obviously, every person and organization living in America is impacted when taxes increase, and that's what tariffs are. So in one sense, Palantir will experience higher costs for the goods and materials it needs to run its operations.

However, in a larger sense, Palantir is likely one of the companies least affected by tariffs. That's because the company provides a service (AI-powered platforms) to its customers. Since the company isn't engaged in manufacturing and then selling its products abroad, it should remain insulated from tariffs.

Granted, there are ways for other countries to retaliate against service providers, including fines, litigation, or outright bans. However, there are no signs thus far that anything like that is likely at this stage. Moreover, given Palantir's close working relationship with government organizations throughout Europe, I believe it's unlikely Palantir will become a victim of the trade war.

Is Palantir a buy now?

So Palantir's prospects appear minimally affected by the trade war. But what about its overall prospects?

I think the company's stock remains a buy. Here's why.

Organizations are rushing to implement AI-powered technology because it save them vast amounts of money. With so much data being collected in nearly every field, it's simply impossible for any human -- or group of humans -- to sort through it in real time and make intelligent decisions based on it.

However, AI is the perfect entity to perform this superhuman task. As a result, I fully expect organizations to ramp up their investments in AI. Palantir, as one of the leaders within the AI space, should continue to benefit from this increased spending for years to come. Savvy investors should take note: Palantir could be a stock to own for a long, long time.