PLTR Stock Alert: Palantir receives Pentagon contract for Maven AI

Palantir (NYSE:PLTR) has just won a $480 million contract to work on an artificial intelligence (AI) called “Maven Smart System” for the US Army.

The contract runs for five years. Maven’s goal is to support intelligence analysts by “integrating data from intelligence, surveillance and reconnaissance systems.”

PLTR stock is up more than 1.5% at the time of writing following this news. Shares opened at $21.28 with a market cap of over $47 billion. Palantir had revenue of $2.2 billion in 2023.

Back to the Future

Although Maven is described as AI, this news marks a return to Palantir’s original goal of collecting and analyzing large data sets in real time and providing answers to queries. It does not replace analysts, but only complements their work.

Palantir grew 44 percent last year on the back of the current AI hype. However, the company’s revenue growth has not accelerated significantly. That’s because it’s primarily a military contractor. Faster growth depends on civilian government contracts and its commercial division.

In February, Wedbush raised its price target on PLTR stock to $30 per share after Palantir reported revenue of $284 million, up 32%. However, since that rise to $25 after the earnings announcement, Palantir has fallen about 20%.

The company’s earnings release on May 6 did not bring any positive developments. Palantir reported 21% year-over-year revenue growth and estimates that full-year revenue will be between $2.67 billion and $2.68 billion, with positive net income.

Palantir remains more popular among retail investors and speculators than professionals. On TipRanks, 12 analysts cover the stock and have an average Hold rating. Meanwhile, on Stocktwits, some traders expect the new contract to rise, with one claiming Palantir has beaten expectations. Alphabet (NASDAQ:GOOG:GOOGLE) Google AI wins Maven deal.

I was on the side of the pros in this argument. Palantir offers proprietary technology and its commercial product, called Foundry, requires extensive setup.

What happens next?

My January assessment of Palantir was wrong, as February earnings surprised to the upside. Bank of America recently raised its price target on PLTR stock to $28.

At the time of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com policies. Publishing guidelines.