Palantir Technologies (PLTR, Financial) has seen its shares nearly double in just over a month, driven by a series of positive announcements and market speculation. The company's Q3 earnings report sparked a significant rally, further fueled by its decision to transfer its Class A common stock to Nasdaq from NYSE, aiming to meet the Nasdaq-100 index eligibility. Additionally, Palantir received FedRAMP high baseline authorization, enhancing its previous moderate authorization.
Recent news has pushed PLTR to record highs, though profit-taking has occurred. On Friday, PLTR and Anduril, a defense technology firm, announced a new consortium to deliver AI infrastructure for the U.S. government. Today, PLTR revealed an expansion of its U.S. Special Operations Command (USSOCOM) contract, valued at just under $37 million, positioning PLTR as the lead software integrator for the Mission Command System.
- PLTR's role as the lead software integrator for USSOCOM's Mission Command System underscores growing confidence in its AI software technology. This marks PLTR's first support for U.S. Special Operations Forces (SOF).
- The public sector accounts for about half of PLTR's annual revenue, crucial for its growth. U.S. government revenue growth accelerated significantly in Q3, the fastest year-over-year rate in nearly four years, thanks to PLTR's Builder Bootcamps. Expansion within the U.S. government, where software switching is less frequent than in the private sector, could drive further growth.
- The partnership with Anduril enhances PLTR's influence within the U.S. government. This collaboration focuses on national security data, transforming data from sensors, vehicles, weapons, and robots into AI capabilities using PLTR's AI Platform (AIP). While financial details are undisclosed, the partnership could extend to other industry partners, potentially generating additional revenue streams.
Following PLTR's Q3 results, the company's momentum in AI remains strong, suggesting potential for further gains. However, with a 172x forward earnings multiple and 74x forward sales valuation, reminiscent of early 2021 levels, any minor setbacks could lead to significant selling pressure.
