Palantir (PLTR) Stock Hits One-Year High on New Contracts and AI Growth

TLDR

• PLTR stock climbed more than 3% Wednesday, moving above $190 for its highest level in nearly a year.
• The stock is up 69% over the past three months on strong results and growing demand for its AI platform.
• The U.S. Army awarded Palantir a $48.1 million contract to build a new ammunition-management system.
• Palantir is expanding overseas, with new partnerships tied to Poland, Lithuania, Japan, Nvidia and Nebius.
• Wall Street holds a Moderate Buy consensus on PLTR, with an average price target of $201.74.

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Palantir Technologies (PLTR) stock is having another strong week. The stock climbed more than 3% on Wednesday and moved above $190 a share, its highest level in nearly a year.

Palantir Technologies Inc., PLTR

The move adds to a run that has seen the stock gain 69% over the past three months. Stronger-than-expected results and growing use of its Artificial Intelligence Platform have kept demand high.

Revenue jumped 93% year-over-year in the second quarter, reaching $1.94 billion. Contracted commercial demand in the U.S. continued to grow at a triple-digit pace.

New Government and International Deals

The latest push came from the U.S. Army. Palantir won a $48.1 million contract to build an enterprise ammunition-management system that will replace nine older systems with one platform.

The company is also growing its footprint outside the U.S. CEO Alex Karp met with the presidents of Poland and Lithuania this week to discuss possible technology investments.

Palantir has also announced new partnerships with Nvidia, Nebius and Method Security. A separate deal with Fujitsu aims to expand Palantir’s software across enterprise networks in Japan.

The FAA has become another growth avenue for the company. The agency recently began using Palantir’s AI-powered SMART system at three Washington-area airports to spot congestion and other issues early.

Rosenblatt analyst John McPeake reiterated a Buy rating on the stock and set a $225 price target. He pointed to further FAA opportunities as a reason for his outlook.

Valuation Faces Pressure From Rising Yields

Palantir’s growth story is running into a tougher backdrop for high-multiple stocks. The 10-year Treasury yield was near 4.96% as of September 23, after the Federal Reserve raised interest rates by 25 basis points at its September 16 meeting.

Higher yields tend to weigh on stocks whose value depends on cash flows expected far into the future. Palantir trades at roughly 160 times trailing earnings, a level that assumes strong growth for years to come.

Even so, the company’s own numbers support the growth case. U.S. commercial remaining deal value reached $6.24 billion in the second quarter, up 124% year-over-year and outpacing revenue growth.

Palantir’s guidance calls for revenue growth of approximately 82% for the full year. Adjusted free cash flow guidance sits between $4.5 billion and $4.7 billion.

Wall Street’s view on the stock remains largely positive. Of 22 analyst ratings issued over the past three months, 16 are Buys, four are Holds, and two are Sells, giving PLTR a Moderate Buy consensus.

The average price target across those analysts stands at $201.74, suggesting further upside from current levels. The next test for the stock will be whether Palantir can convert its new government and international deals into sustained revenue growth.