Palantir Technologies (PLTR) recently expanded its defense sector footprint with multiple significant announcements. The company’s latest moves include a partnership with Anduril Industries to boost AI training for military applications and a $36.8 million contract with the U.S. Special Operations Command (SOCOM).
Palantir expands defense presence with AI partnership and contract
On December 6, Palantir confirmed its collaboration with Anduril to enhance artificial intelligence training in defense contexts. This partnership aligns with Palantir’s mission of delivering big-data analytics that identify complex patterns and applications in security and privacy. Following this, on December 9, Palantir secured a contract with SOCOM to act as the lead software integrator for its Mission Command System. This deployment marks the first utilization of Palantir’s Mission Manager platform within special operations units, suggesting significant potential in military applications.
Palantir shifted its stock listing from the New York Stock Exchange to the Nasdaq Global Select Market on November 26, increasing its eligibility for the Nasdaq 100 index, which is closely monitored by passive investment funds. This strategic move could enhance shareholder value, as indicated by Wall Street veteran Stephen “Sarge” Guilfoyle, who described it as a step towards broader market appeal, according to a The Street report. Guilfoyle recently raised his price target for Palantir to $90, the highest among analysts, emphasizing the opportunities presented by its defense contracts and AI growth.
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Despite these positive developments, Palantir’s stock has experienced volatility, dropping 5.1% on December 9 amid a general decline across major U.S. indexes. Investors are weighing whether this downturn is a buying opportunity or foreshadows further declines. Meanwhile, analysts from Jefferies and Argus expressed skepticism regarding Palantir’s valuation, downgrading the stock due to concerns about its fundamentals. Jefferies indicated that Palantir would need to sustain a 40% growth rate for four consecutive years to support its current price, which seems unlikely. As of December 10, Palantir’s forward price-to-earnings ratio stood at a staggering 161, raising questions about whether the stock is overvalued relative to its peers.
Investors should note that roughly half of Palantir’s available shares are owned by individual investors, highlighting the company’s broad appeal. The stock’s closing price was $72.46 on December 9, reflecting notable gains over the year, with shares more than quadrupling through December 10. Analysts are cautious, forecasting a potential decline in Palantir’s stock price. The consensus suggests a decline to approximately $39.57 within the next 12 months, pointing to an implied drop of nearly 50%.
Given the current economic environment and pending macroeconomic data releases, further volatility could be on the horizon. Guilfoyle noted that upcoming announcements related to Palantir’s inclusion in the Nasdaq 100 might impact its share price. With the index reconstitution scheduled for December 13, investors will be closely watching these developments.
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Featured image credit: Palantir
