Palantir Extends $619M U.S. Army AI Contract, Faces Stock Valuation Concerns

The tech firm's stock has surged over 330% this year, but analysts question its valuation despite a major military contract extension.

Palantir Technologies has extended its U.S. Army contract under the Army Vantage program, valued at $400.7 million over four years, with a potential ceiling of $618.9 million.
The company’s software integrates and analyzes data to enhance military decision-making, with over 100,000 users supported this year—a record for the program.
Palantir's stock has risen more than 330% year-to-date and is set to join the Nasdaq 100 Index next Monday, reflecting strong market confidence.
Despite the stock's gains, UBS analysts gave Palantir a neutral rating, citing concerns over its high valuation at 49 times revenue and 124 times free cash flow for 2025 estimates.
The contract extension underscores Palantir's growing role in military AI and data solutions, though ethical and privacy debates around such technologies persist.