Palantir Extends Gains on Back of US Army Deal, Up 15% this Week
Data analytics and enterprise software provider Palantir won a $250 million deal with the US Defense Department (DoD) this week to research and develop artificial intelligence (AI) and machine learning (ML) technologies. The company’s shares jumped 2.5% on Friday, extending this week’s gains to over 15%.
Palantir Wins $250M Contract with US DoD
Palantir’s shares rose higher at the opening bell on Friday, extending their previous gains fueled by the company’s milestone deal with the US Defense Department announced earlier in the week. The stock was trading at $16.16 at the time of writing, up 2.5%.
On Wednesday, reports revealed that Palantir won a $250 million contract with the US Defense Department to research and develop AI and ML technology, underscoring the company’s growing presence in AI.
According to Bloomberg, the AI deal will build on the work Palantir has been doing for the Army Research Lab since 2018. Under the terms of the new deal, the data analytics giant will “conduct research and development services” in AI and ML.
Louie DiPalma, an analyst at William Blair, wrote in a research note that Palantir’s new agreement with the Defense Department is not likely to significantly impact the company’s profit, mainly because services deals typically have lower margins than those related to software. However, the deal underlines Palantir’s closeness with the US government and “bodes well” for its Q4 and 2024 revenue growth.
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ChatGPT Turns to Enterprise Businesses
Meanwhile, ChatGPT maker OpenAI – the company most responsible for the latest AI boom – made headlines again by announcing a flagship program for enterprise businesses. The move made OpenAI the latest major player to join this market and potentially challenge companies targeting enterprise clients, including Palantir.
Notably, Palantir’s systems have been one of the favorites among enterprise businesses, particularly its four platforms Apollo, Gotham, Foundry, and AIP. Although the specific use cases of these platforms vary, all of them heavily rely on AI and ML technologies.
But now, there is “a new kid on the block.” After seeing unprecedented success with its AI models, Microsoft-backed OpenAI seems ready to take the next step with the ‘ChatGPT Enterprise.’ Reports say that the new program is a more sophisticated chatbot assistant than its predecessor, although it remains to be seen how quickly, and if at all, it can challenge Palantir’s dominance.
Do you think Palantir’s leadership is in jeopardy after OpenAI’s enterprise move? Let us know in the comments below.