Shares of Palantir Technologies (PLTR) are on the rise on Wednesday after the company announced that the Army Contracting Command – Aberdeen Proving Ground, or ACC-APG, has awarded its subsidiary Palantir USG a prime agreement for the development and delivery of the Tactical Intelligence Targeting Access Node, or TITAN, ground station system. Commenting on the news, BofA said it sees the win “cementing Palantir as the AI Prime in the world of Defense.”
ARMY TITAN DEAL: Palantir Technologies announced that the Army Contracting Command – Aberdeen Proving Ground, or ACC-APG, has awarded Palantir USG, a wholly-owned subsidiary of Palantir Technologies, a prime agreement for the development and delivery of the Tactical Intelligence Targeting Access Node, or TITAN, ground station system, the Army’s next-generation deep-sensing capability enabled by artificial intelligence and machine learning, or AI/ML. The agreement, valued at $178.4M, covers the development of 10 TITAN prototypes, including five Advanced and five Basic variants, as well as the integration of new critical technologies and the transition to fielding.
TITAN is a ground station that has access to Space, High Altitude, Aerial, and Terrestrial sensors to provide actionable targeting information for enhanced mission command and long range precision fires. This was awarded through an Other Transaction Authority agreement, which allows the Army to leverage innovative solutions from non-traditional defense contractors. This award is a successful progression of the Army’s competitive, software-centric approach to the June 2022 competitive prototyping phase of the TITAN Program.
AI PRIME: Keeping a Buy rating on the shares, BofA raised its price target on Palantir to $28 from $24 after the company was named prime contractor on the Army’s TITAN ground station system contract. This is the first time a software company has been named the prime on a “hardware” production program, which the firm sees as a signal that the Department of Defense is “embracing change” and views the news as ushering in “a new era of procurement.” The firm believes the win cements Palantir as the “AI Prime in the world of Defense.”
Also commenting on the announcement, Jefferies noted that Palantir beat out RTX (RTX) after three years of design and prototyping, with the former differentiating itself through the integration of AI/ML on its modular platform to enable smoother, simpler operation for soldiers on the ground. Palantir is working with Northrop Grumman (NOC) and L3Harris (LHX) as subcontractors with full production expected in 2026, the firm adds. Jefferies has a Hold rating on RTX with a price target of $100 on the shares.
PRICE ACTION: In Wednesday morning trading, shares of Palantir have gained over 9% to $25.95.
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