Palantir jumps on big expansion to federal defense contract

Shares of Palantir — a retail trader fave and top Trump stock — popped on Thursday after the US Department of Defense said it was adding nearly $800 million onto an existing $480 million contract with the company to provide the software for the Maven Smart System, an AI-driven targeting system that combines weaponry, drone, satellite, and intelligence data into the so-called “kill chain” used to make firing decisions.

The “contract modification” for $795 million is technically for additional software licenses and pushes the ceiling on the program up to nearly $1.3 billion for work that the Army expects to be completed over the next four years.

Analyst Louie DiPalma of William Blair thinks spending on the program could translate into roughly $200 million in revenue for 2025 and increase by $50 million per year for the next several years. That could help support the fast top-line growth that has made the shares a favorite of traders.

While Palantir has been building out its AI software business with corporate clients, the US government remains its single largest customer, making the defense budget a crucial focus for the company.

Rumors that President Trump’s defense department would cut expenditures by 8% cratered the stock back in February.

But such belt-tightening seems to have gone out the window, with the Republican budget bill that just passed through the House of Representatives adding $150 billion in new spending for the Pentagon. Some $25 billion of that spending is earmarked for the president’s “Golden Dome” missile defense project, which Palantir is well positioned to get a piece of as well.