Final yr, it appeared like all anybody might speak about was how large tech was going to vary the world with synthetic intelligence (AI). Amongst the “Magnificent Seven” shares — Nvidia, Microsoft, Apple, Alphabet, Meta Platforms, Amazon, and Tesla — it shortly turned clear that AI can be the subsequent megatrend, and these firms have been amongst its greatest influences.
Nonetheless, smaller gamers have emerged and given large tech a run for its cash. Information-analytics specialist Palantir Applied sciences(NASDAQ: PLTR) would possibly simply be the newcomer that can really maintain its personal over the long term because it competes with bigger firms.
As of this writing, Palantir is the top-performing inventory in the S&P 500 for 2024. A lot of these beneficial properties stem from investor enthusiasm round Palantir’s latest software program suite — the Synthetic Intelligence Platform (AIP). Nonetheless, regardless of AIP’s fast adoption over the final yr, many buyers deal with its use circumstances in the personal sector.
However beneath, I will discover a lesser-known alternative that Palantir is quietly dominating, one that can probably be the firm’s greatest catalyst in 2025.
For the final two years, buyers have been instructed advert nauseum how AI will result in increased productiveness ranges in the office and be the impetus for game-changing applied sciences, akin to humanoid robotics or self-driving vehicles. However one space that constantly will get missed is how AI is enjoying a job in the protection sector — particularly, in army operations.
Evaluation from Mordor Intelligence suggests AI purposes in the army embrace information analytics and robotics automation, which mix for a complete addressable market dimension of over $60 billion. Beneath, I will element some of Palantir’s main wins thus far in this house.
Picture supply: Getty Photos
What I discover encouraging about Palantir’s public sector operation is that the firm works with each authorities companies and companions with different know-how firms seeking to get entangled with protection operations. Earlier this yr, Palantir and Microsoft joined forces for a marketing campaign that integrates AIP into Microsoft’s Azure cloud infrastructure, particularly in secured environments throughout the Division of Protection (DOD).
Extra just lately, Palantir cast one other alliance with a significant cloud supplier, Amazon Internet Companies (AWS). The partnership represents one other use case for Amazon’s massive language mannequin (LLM) Claude and the way it can now combine with AIP throughout protection companies.
Lastly, Palantir just lately partnered with Meta. Much like the offers with Microsoft and Amazon, Meta might be leveraging Palantir’s capabilities throughout its LLM (known as Llama) as the firm appears to make a splash throughout the public sector in its personal proper.
Exterior of partnering with large tech, Palantir has additionally secured a quantity of profitable federal contracts over the previous few months. Some notable examples embrace a multiyear deal price as much as $100 million as half of Palantir’s Maven contract, in addition to a deal price almost $1 billion with the Naval Info Warfare Heart (NIWC).
On high of the offers received immediately from the authorities, Palantir has additionally struck partnerships with attention-grabbing gamers exterior of large tech. For instance, the firm simply introduced an alliance with Anduril — a start-up that develops autonomous techniques, akin to underwater drones. As well as, the firm additionally partnered with authorities consulting chief Booz Allen Hamilton.
Whereas Palantir has lengthy loved a foothold in the public sector (and particularly with U.S. authorities companies), the many offers and partnerships it has signed just lately spotlight the firm’s continued momentum. Additionally they sign that the authorities is growing its funding in AI with Palantir being a constant beneficiary of such work.
The corporate’s U.S. authorities enterprise might present vital acceleration traits subsequent yr as its numerous partnerships and contracts bear fruit.
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John Mackey, former CEO of Complete Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. Suzanne Frey, an govt at Alphabet, is a member of The Motley Idiot’s board of administrators. Randi Zuckerberg, a former director of market improvement and spokeswoman for Fb and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Idiot’s board of administrators. Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Palantir Applied sciences, and Tesla. The Motley Idiot has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Palantir Applied sciences, and Tesla. The Motley Idiot recommends Booz Allen Hamilton and recommends the following choices: lengthy January 2026 $395 calls on Microsoft and quick January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.
