Innovative technology developer Palantir Technologies (NYSE:PLTR) didn’t get off to a great start in October. Today we saw signs that this trend may be reversing, though, as news emerged of a new partnership between the big data analytics company and the U.S. Military. A statement issued by the company this morning confirmed that they had secured a lucrative contract with the U.S. Army’s Program Manager for Intelligence Systems and Analytics to provide exactly what it does best — data analysis and analytics. It didn’t take long for PLTR stock to spike.
What Happened with PLTR Stock
PLTR stock began the month with some volatility, sinking by as much as 4.68% on Oct. 4. The previous month was also fairly turbulent, with declines of almost 9% for the month. With that said, the stock is still up by more than 4% for the year. Shares rose last month when news broke of the company’s acquisition of geospatial intelligence platform BlackSky (NYSE:BKSY).
News of this contract, though, immediately sent the stock soaring by more than 7% as markets opened this morning. Although it’s come down a bit since then, PLTR stock is still up almost 5% as of this writing. Premarket trading this morning saw it rise by more than 8%.
What It Means
Just how lucrative is this contract for Palantir? Well, according to the statement, it’s worth $823 million, and Palantir is getting the majority of it, having beat out five other companies including international rival BAE Systems (OTCMKTS:BAESY), whose stock has fallen today while Palantir’s has soared.
Previously, the company had successfully collaborated with the U.S. Army on a “Test, Fix, Test” process, likely securing the institution’s faith in Palantir’s technology. The technology in question, Palantir Gotham Platform, will be deployed after final testing to “support Army Intelligence users worldwide with a globally federated Intelligence data fabric and analytics platform spanning multiple security classifications.”
According to Palantir, it will include “modern data integration, correlation, fusion, and analytic capabilities that prepare the Army for the next fight against emerging near peer threats.”
Why It Matters
It’s no secret that a substantial military defense contract can easily serve to boost a stock. For investors in PLTR stock, this could prove an especially important development. After all, the program will be in place until 2027, seven years from the date of its initial launch in 2020. The previous year consisted of companies developing proposals and demonstrating their technology.
This isn’t the first government contract for Palantir. Summer 2021 saw it sign several defense contracts, worth a total of$169 million, which also served to boost PLTR stock. InvestorPlace’s Vandita Jadeja predicted that these developments would “put Palantir on top,” while also noting the company’s vast dealings with commercial clients.
Nothing has transpired then to dispute that theory in the long term. Palantir’s potential for growth has only increased with this lucrative new Army contract. If you’re considering a bullish play, PLTR stock is absolutely worth watching as this partnership continues.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
