The U.S. Army has awarded an enterprise contract to Palantir (PLTR) to help the military streamline efficiencies while also preparing for enemy threats.
The deal carries a headline value of $10 billion, making it the largest Department of Defense contract award in history. But there’s a catch some investors missed.
In its release, the Army clarified that the figure represents “the maximum potential value of the contract, not any specific obligations or commitments.” That means actual spending could come in well below that ceiling.
Under the arrangement, the Army will consolidate 75 separate software and data contracts into a single, decade-long enterprise framework with Palantir, allowing it to purchase data platforms and AI tools to modernize operations.
This includes everything from battlefield logistics to decision-making software as needed. “resulting in significant cost efficiencies across mission-critical programs,” the Army noted.
"This Enterprise Agreement represents a pivotal step in the Army's commitment to modernizing our capabilities while being fiscally responsible," Leo Garciga, the Army’s chief information officer, said in a statement. "
By streamlining our procurement processes and leveraging enterprise-level discounts, we are not only enhancing our operational effectiveness but also maximizing our buying power."
Palantir hasn’t commented on the contract.
Tailwinds pick up speed
The new agreement builds on Palantir’s growing defense footprint.
The AI-powered data firm previously landed a $178-million contract to develop and deliver 10 prototypes by 2026 for the Army’s Tactical Intelligence Targeting Access Node (TITAN) system, a next-generation ground station designed to fuse data from satellites, drones, and terrestrial sensors.
Palantir beat out defense giant RTX for that contract and has already delivered the first two prototypes in March.
The TITAN trucks combine space, aerial, and terrestrial data with AI and machine learning to provide mission commanders with targeting information for long-range precision strikes.
In a client note Friday, Wedbush analyst Daniel Ives maintained an Outperform rating on Palantir, calling it “a top tech pick for 2025.”
With the $10 billion Army agreement, Ives sees additional momentum for Palantir as AI initiatives ramp up across federal agencies under the Trump administration.
“We believe this deal represents an additional tailwind for PLTR with AI initiatives across the US government, accelerating with AI strategic focus on the federal front and Palantir in the sweet spot to benefit from a tidal wave of federal spending on AI,” Ives wrote, maintaining a $165 price target.
“We believe this deal represents another opportunity for PLTR to capitalize on while continuing to generate unprecedented traction for its entire portfolio across the federal and commercial landscapes,” he added.
A significant chunk of Palantir’s revenue comes from U.S. government contracts, and CEO Alex Karp has said that the push for AI-generated efficiencies across the federal workforce under the Trump administration plays in the company’s favor.
“Disruption exposes things that aren’t working,” Karp said during an earnings call in April. “We love disruption, and whatever is good for America will be good for Americans — and very good for Palantir.”
Palantir’s stock has surged 106.5% this year. The company will report its Q2 earnings on Aug. 4.
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