Palantir Secures $178M Army Deal, Analyst Highlights AI Expansion Prospects

Mizuho analyst Gregg Moskowitz maintained Palantir Technologies Inc PLTR with a Neutral and raised the price target from $18 to $21.

Palantir disclosed today that it has won a $178 million two-year contract extension from the ACC Aberdeen Proving Ground (or APG, the U.S. Army’s primary site for conducting research, evaluating, and developing specialized material). 

In particular, Palantir has agreed to develop further and build the Tactical Intelligence Targeting Access Node (TITAN) ground station system, the Army’s next-generation deep-sensing technologies powered by advanced AI/ML. 

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Palantir will likely develop ten TITAN prototypes, five of which are being labeled as advanced, along with the integration of “new critical technologies” and transition to fielding. 

Palantir will also deliver software and hardware solutions to the Army, thus serving as the foundation to help better correlate and integrate timely sensor data. 

Interestingly, Palantir is also helping deploy the Army’s first AI-enabled vehicle.

The new deal represents a significant extension from the Army’s prior June 2022 award. It includes software and hardware solutions to enhance further the U.S. Army’s first AI- and ML-driven ground station.

On a separate note, Palantir will also host its AIPCon event on Friday. Management disclosed that the oversubscribed event will feature more than 60 customers showcasing their usage of Palantir’s Artificial Intelligence Platform, more than twenty of which are new Palantir customers.

Broome is encouraged by Palantir’s recently improved execution, which includes a healthy fourth-quarter revenue upside driven by impressive U.S. commercial growth. 

Moreover, he noted that Palantir has a promising opportunity to meaningfully monetize its AI capabilities in the future. 

That being said, he noted that further multiple expansion may be challenging at current levels.

The analyst said that Palantir trades at a ~60% premium to Broome’s enterprise software peer group median for the current year, reflective of Palantir’s strategic solid positioning with large customers and the potential for accelerated growth in future years.

Broome projects first-quarter revenue and adjusted EPS of $616 million and $0.08, respectively.

Investors can gain exposure to the stock via Global X Funds Global X Defense Tech ETF SHLD and Tidal ETF Trust II The Meet Kevin Pricing Power ETF PP.

Price Action: PLTR shares are trading higher by 3.40% to $27.05 on the last check Thursday. 

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