Palantir (NYSE: PLTR), renowned for its data analytics and artificial intelligence (AI) software, has a track record of securing substantial government contracts totaling billions of US dollars.
Recently, the US Army has awarded it another contract to work on phase 3 of the Tactical Intelligence Targeting Access Node (TITAN), which has a total value of $1.5 billion, as William Blair’s Louie DiPalma reported.
The news could have influenced PLTR stock already as it added 1.30% to its value in pre-market.
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Phase 3 of a two-year contract amounts to approximately $178 million. This phase follows the successful completion of phase 2, which was worth $36 million and was executed by PLTR in June 2022.
How much will Palantir’s revenue benefit from TITAN?
TITAN, a tactical ground station, leverages data from terrestrial and space sensors for precise long-range targeting and battlefield planning.
In the second phase of prototyping, Palantir and defense contractor RTX Corporation (NYSE: RTX) were awarded $36 million, 14-month contracts. However, the Army indicated its intention to select only one vendor for the subsequent phase 3, which is likely to be Palantir, according to DiPalma.
Despite the high probability of securing the contract, the additional revenue would still leave Palantir’s 2024 revenue forecast slightly below consensus expectations, ranging from $2.65 billion to $2.67 billion, compared to the anticipated $2.8 billion.
Shift from government contracts toward commercial solutions
Palantir, originally closely associated with the US government and receiving government contracts since its establishment in 2003, appears to be transitioning its focus from government to commercial solutions, driven by advancements in AI technology.
With the widespread adoption of AI and businesses seeking to maximize their data potential, Palantir has seen a remarkable surge in demand. In the last quarter, its commercial revenue notably increased.
Moreover, the company has initiated AI boot camps to assist businesses in exploring AI use cases through hands-on experience with Palantir’s software.
This trend will likely persist well into 2024 and beyond, positioning PLTR toward a more commercial-orientated future.
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