Palantir Technologies Inc. (NASDAQ: PLTR) stock is back to its bullish ways. After a slight downturn to start the month, the stock has come roaring back. It's up 17% in September and is within striking distance of eclipsing the all-time high (ATH) the stock made in August.
Certainly, Palantir is benefiting from the Federal Reserve’s interest rate cut, which reignited the artificial intelligence (AI) trade. However, this isn’t just a “hopes and dreams” rally. The company received its first $1 billion contract outside the United States. The company will work with the United Kingdom’s Ministry of Defence (MoD) in a five-year deal unveiled when U.S. President Donald Trump visited the U.K. in September.
Shareholders are used to Palantir receiving billion-dollar contracts. However, this deal, an extension of a 2022 deal valued at 75 million euros, adds a significant brick to the wall of worry that investors are climbing relative to PLTR stock.
Becoming the Global Digital Battle-Management System
Outside of its valuation, one area where Palantir bears have had a point is the company’s heavy dependence on the United States for its revenue. That's not surprising due to Palantir’s unwavering support of Western values that may be out of phase with foreign countries.
Nevertheless, this five-year deal formalizes Palantir’s role as a strategic software provider to the MoD. Specifically, it gives the ministry long-term access to Palantir’s Foundry platform for data integration, decision support, and operational planning.
A Separate U.K. Deal on the Commercial Side
When Palantir announces a new deal, there’s usually one or more that follow. In September, Palantir also announced a partnership with Hadean, which is one of the United Kingdom’s leading defense technology scale-ups.
Under the agreement, Hadean’s portfolio of leading-edge wargaming, command and control and battlefield training products will be deployed on Palantir’s Foundry software. The significant takeaway for investors is that Hadean can market its new product to other defense customers.
This isn't an immediate revenue boost for Palantir, but that doesn't mean it won't drive growth.
Connecting the Dots for Investors
The two deals are independent of each other. However, investors can’t be blamed for looking at a “what if” scenario. In this case, it’s more than a theoretical possibility that Hadean could market its new service to the MoD. That would allow Palantir to offer the MoD a solution beyond pure data integration/decision support into live training, operational rehearsal, and digital twin environments.
To be clear, there’s no suggestion that this is happening now. But it’s not hard to see a scenario under which it occurs. If it does, Palantir will increase its value proposition, making it easier for the company to appeal to other allies.
PLTR Stock to $200 ... and Beyond?
On September 23, Bank of America analyst Mariana Perez Mora raised her price target on PLTR stock from $180 to $215. Before this, Dan Ives of Wedbush had the highest price target, $200.
This can be discouraging for investors who are on the outside, wondering if now is a good time to buy Palantir stock.reasons to believe that the stock is overvalued, even in a frothy technology sector. It wouldn’t be uncommon to see PLTR stock drop by 40%. There are many instances of it , as it did earlier this year.
However, it may also be helpful to consider that there is a legion of retail investors who bought PLTR stock when it was trading below $20 and, in many cases, under $10. Those investors aren’t selling, and a key reason for that is that institutional buyers are coming in.
That institutional support is reflected in analyst price targets, not just those of Bank of America or Wedbush. The Palantir analyst forecasts on MarketBeat show no downgrades of the stock in 2025, and almost every analyst has raised their price target.
In fact, the consensus price target for PLTR stock is now $140.22. That’s 23% lower than its closing price on September 23. However, it also means that if PLTR stock were to drop 30% or 40% it would be a screaming bargain that institutional investors won’t miss.
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The article "Palantir Expands UK Defense Role, Stock Eyes New Highs" first appeared on MarketBeat.
