Palantir Scores First $1 Billion Contract; Is It Priced In?

Core Viewpoint - Palantir Technologies has secured a significant $795 million contract with the U.S. Army, marking its first $1 billion contract when combined with a previous $480 million contract signed in 2024 [1][2]. Group 1: Financial Performance - The stock price of Palantir Technologies is currently $121.08, down 1.81% [1]. - The stock has seen a 12.15% increase for the month and a remarkable 67.2% rise in 2025, with over 500% growth in the last 12 months [3]. - The company is trading at a forward price-to-earnings (P/E) ratio of over 397x and a price-to-sales (P/S) ratio of over 92x, indicating a high valuation [4]. Group 2: Government Contracts and Demand - The Maven Smart System contract is part of a Department of Defense initiative focusing on artificial intelligence tools for data fusion and target identification [5]. - There is an expectation of growing government demand for Palantir's technologies, supported by recent statements from the Department of Defense indicating increased use of Palantir's solutions [6]. - Palantir is also positioned to benefit from the Golden Dome initiative being pushed through Congress [7]. Group 3: Commercial Growth - Government contracts account for approximately 55% of Palantir's revenue, but the commercial side is experiencing strong growth, exemplified by a new contract with Bain & Company [8]. Group 4: Market Sentiment and Trading Activity - The 12-month stock price forecast for Palantir is $83.95, indicating a potential downside of 32.08% from the current price [9]. - The options chain shows a significant number of call options with a strike price of $150, suggesting bullish sentiment, while there are also put options at $115, indicating some traders are hedging against potential declines [10]. - Short interest in Palantir has been rising, currently at 3.3% of the float, reflecting a cautious sentiment among some investors [10][11].