Palantir Technologies (NYSE: PLTR) stock jumped almost 10% on Wednesday following the announcement of a $178.4 million contract with the U.S. Army, focusing on artificial intelligence (AI) technology.
Palantir (PLTR) has secured a substantial contract valued at $178.4 million from the Army Contracting Command – Aberdeen Proving Ground (ACC-APG) to develop the Tactical Intelligence Targeting Access Node (TITAN) ground station system. The TITAN system represents the most recent endeavor aimed at enhancing the intelligence, surveillance, and reconnaissance (ISR) capabilities of the U.S. Army through the utilization of artificial intelligence and machine learning (AI/ML) technologies.
According to William Blair analysts, this agreement is Palantir’s fourth-largest contract by annual revenue run rate.
Palantir said,
“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,” adding that it “is deploying the Army’s first AI-defined vehicle.”
Palantir USG President Akash Jain said,
“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 has become a prominent figure in the AI arena, earning recognition from Wedbush analysts who liken it to the “Messi of AI.” However, not all analysts share the same level of enthusiasm. William Blair analysts caution that despite this significant contract, the overall impact of AI on Palantir’s revenue trajectory remains modest.
They said,
“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.”
Palantir (NYSE: PLTR) Stock Reaction
PLTR stock surged 9.74% to close at $26.13 on Wednesday. The traders had exchanged hands with 200,736,500 (200.73 million) shares compared to the average daily trading volume of 68.61 million.
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