Palantir (PLTR) Stock in Focus as FAA Rolls Out New AI Air Traffic System

TLDR

• Palantir stock was slightly higher in Wednesday premarket trading near $185.
• Rosenblatt kept its Buy rating and $225 price target.
• The FAA has launched its SMART AI system around Washington, D.C.
• Air Space Intelligence, not Palantir, holds the main $875 million SMART contract.
• Rosenblatt believes Palantir could still win expanded FAA safety and analytics work.

Palantir (PLTR) stock was up about 0.1% in Wednesday premarket trading near $185 after closing Tuesday at $184.99, up 1.0%. The stock has gained about 4% so far in 2026.

Palantir Technologies Inc., PLTR

The latest catalyst is a Rosenblatt research note examining Palantir’s potential role in the Federal Aviation Administration’s wider AI modernization effort. Analyst John McPeake reiterated a Buy rating and $225 price target.

That target implies roughly 22% upside from Tuesday’s closing price. However, Rosenblatt’s expectation of more FAA revenue is an analyst view, not a newly announced Palantir contract.

FAA AI Rollout Creates a New Opportunity

The FAA began using its SMART system on Monday around three major Washington-area airports. SMART stands for Strategic Management of Airspace, Routes and Trajectories and uses AI to predict congestion and improve flight planning.

The main SMART contract belongs to Air Space Intelligence, which received a 12-year FAA agreement worth $875 million in June. The system is initially being tested in the Washington area before a broader rollout.

That distinction is important for Palantir investors. Palantir did not win the primary SMART contract, and there has been no confirmed announcement that it will receive part of that $875 million award.

Rosenblatt nevertheless believes there could be room for multiple vendors as the FAA expands its use of AI and predictive analytics. The firm sees Palantir’s existing relationship with the agency as a possible route to additional work.

Palantir began working with the FAA in 2021 on aircraft safety monitoring following concerns around the Boeing 737 MAX. Rosenblatt estimates that earlier contract was worth about $18 million.

McPeake believes the FAA is expanding Palantir’s use cases into broader safety and predictive applications. That assessment comes from Rosenblatt’s analysis of Palantir’s recent AIPCon presentation rather than a new FAA award.

Government Growth Supports the Case

Government business remains a major part of Palantir’s revenue base. Rosenblatt noted that government customers accounted for 51% of second-quarter revenue, while the company’s overall revenue growth remained strong.

Palantir’s second-quarter results were another reason investors have remained interested in the stock. U.S. sales more than doubled year over year, helping fuel a strong August rally.

The FAA opportunity could add another growth source if Palantir’s existing safety tools are expanded across more programs. For now, however, the size and timing of any future revenue remain uncertain.

The main risks are valuation, dependence on continued government contract growth and the possibility that FAA spending flows primarily to other vendors. Air Space Intelligence already holds the central SMART contract, so Palantir’s role should not be overstated.

The latest confirmed development is the FAA’s rollout of SMART and Rosenblatt’s decision to maintain its $225 target. Palantir was holding near $185 Wednesday morning as investors weighed the potential for additional FAA work against the lack of a newly announced contract.