Palantir Stock Surges on $178.4 Million US Army Contract Focused on AI

Palantir Technologies (PLTR) shares surged 10% in early trading Wednesday after the company announced it secured a $178.4 million U.S. military contract focused on artificial intelligence (AI) and machine learning (ML) tech for the Army.

The contract covers the development and delivery of the Tactical Intelligence Targeting Access Node (TITAN) ground station system, the Army’s "next-generation deep-sensing capability" enabled by AI and ML.

The $178.4 million contract is Palantir’s fourth-largest contract by annual revenue run rate, according to William Blair analysts.

"TITAN is a ground station that has access to Space, High Altitude, Aerial, and Terrestrial sensors to provide actionable targeting information for enhanced mission command and long range precision fires," Palantir said, adding that it "is deploying the Army’s first AI-defined vehicle."

“This award demonstrates the Army’s leadership in acquiring and fielding the emerging technologies needed to bolster U.S. defense in this era of software-defined warfare,” Palantir USG President Akash Jain said.

Palantir has emerged as a major benefactor of the AI boom, with Wedbush analysts designating it the "Messi of AI."

Other analysts are less bullish, with William Blair analysts noting that "ultimately, AI has not made a profound impact on Palantir’s consolidated revenue trajectory."

"Even when adding this $89 million per year TITAN contract to 2024 revenue, the total is still below analyst projections when the stock was trading 67% lower, despite robust demand environments on both the commercial and defense sides of the business," they said.

Palantir shares were up about 10% at $26.20 as of 11:35 a.m. ET Wednesday. So far this year, the stock has gained more than 57%.