Palantir Stock Jumps on a Military Deal. Can the Stock Continue Its Momentum?

Geoffrey Seiler, The Motley Fool

Wed, Apr 16, 2025, 4:00 AM 5 min read

Winning military deals isn't new for Palantir Technologies (NASDAQ: PLTR). The U.S. government is its largest customer, with the Department of Defense (DOD) one of its biggest benefactors.

However, Palantir's latest military deal isn't with the U.S. government; it's with NATO (North Atlantic Treaty Organization). That's a significant win and could help bolster the company's growth moving forward.

Last year, Palantir saw strong revenue growth coming from both U.S. commercial customers and the U.S. government, which is its biggest customer. Where it wasn't as strong was in international markets. However, the NATO deal could be about to change things.

The deal with NATO is for a version of Palantir's Maven Smart System, which uses artificial intelligence (AI) to help improve military intelligence, targeting, and strategic decision-making. The U.S. government deploys its own version of Maven under a five-year contract valued at nearly $100 million. The platform has also been used by Ukraine in its war with Russia. Maven can gather information from various sources, such as satellite imagery and drone footage, to track troop movements and offer tactical recommendations.

The contract with NATO took just six months to complete and is expected to be operational within the next 30 days. It is one of NATO's quickest procurements. Terms of the deal were not disclosed, but based on the size of the U.S. deal, it is likely pretty large.

With threats from President Donald Trump that the U.S. could leave NATO if other countries do not increase defense spending, the alliance and its European members have been rushing to beef up their military spending. This may allow Palantir to secure more contracts with NATO and European countries uncertain about U.S. support in conflicts.

If this happens, international government growth could become the third leg of Palantir's growth drivers. Its biggest growth right now is coming from U.S. commercial customers, which are using its platform to identify problems where they can apply AI to provide actionable solutions. It's looking to be an AI operating system for its customers, with a focus on making AI actionable. Many of its commercial customers are testing concepts, offering significant growth potential as they move to real-world solutions.

Meanwhile, the company saw renewed growth with the U.S. government, as its largest customer began to embrace the power of AI solutions. Revenue from the U.S. government grew 30% in 2024 and accelerated to grow by 45% in Q4. The company won several big contracts with the Pentagon in the process.