Palantir Technologies Inc. (PLTR) has started delivering next-generation ground system to the U.S. Army as part of its $178 million contract, known as Titan, according to a Bloomberg report. This marks a major milestone for the software company in its collaboration with the U.S. military and highlights the increasing role of software in modern warfare.
The company did not confirm the exact date for its next delivery, but it expects to complete all 10 TITAN systems by 2026. Afterward, the U.S. Army will decide whether to move forward with full-rate production. While the Army hasn’t specified the number of units it will purchase, officials estimate between 100 and 150 systems.
What Is the Titan System?
In March 2024, the U.S. Army awarded Palantir a $178 million contract to develop 10 next-generation ground systems powered by AI, called Titan.
The Titan system, short for Tactical Intelligence Targeting Access Node, marks the first time a software company is acting as a main contractor for the defense sector. The system is powered by Palantir’s advanced AI and data analysis technology and was developed with partners, including Anduril Industries, Northrop Grumman (NOC), L3Harris (LHX), and others. Notably, the system collects information from various sensors and systems, such as satellites, and processes it to give soldiers better awareness of their surroundings and more accurate targeting capabilities.
US Government Budget Cuts Raise Concerns for Palantir
Last month, The Washington Post reported that U.S. Defense Secretary Pete Hegseth plans to cut from the defense budget each year for the next five years. As a key supplier of software and tech services to the military, Palantir’s revenue could take a big hit from these cuts. Consequently, PLTR stock took a significant hit, falling more than 25% over the past 30 days. This decline was further influenced by CEO Alex Karp’s heavy stock-selling activity in recent weeks.
Interestingly, Palantir Technologies generated $1.20 billion in revenue in 2024 from the U.S. government, marking a 30% year-over-year increase.
Is PLTR Stock a Good Buy?
Overall, Wall Street has a Hold consensus rating on PLTR stock, based on four Buys, 10 Holds, and four Sell recommendations. The average share price target for Palantir is $95.33, which implies an upside of 18.5% from current levels.
