Palantir Just Launched Warp Speed for Warships. Does That Make PLTR Stock a Buy?

Yahoo

14-07-2025

Defense stocks often fly under the radar, but when innovation and military demand collide, the potential upside can be massive. From shipbuilders to software providers, companies serving the U.S. Department of Defense are increasingly tapping into AI-driven tools to accelerate performance and gain long-term contracts.
One such company is Palantir Technologies (PLTR), which has gained significant traction in a short time thanks to its deepening ties with the U.S. military.
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The company just took a major leap forward with the launch of Warp Speed for Warships, a new initiative in collaboration with the U.S. Navy and the BlueForge Alliance. Designed to digitally transform America's maritime supply chain and shipbuilding ecosystem, the program aims to accelerate warship production and bolster national defense readiness using Palantir's AI‑powered platforms.
With PLTR stock already sitting near all-time highs and institutional buying surging, the launch of Warp Speed could mark a pivotal moment. Here's what investors need to know about Palantir's bold defense push.
Founded in 2003, Palantir Technologies is a tech company that develops software platforms for the intelligence community and commercial enterprises globally. The company offers several key products, including Palantir Gotham, Foundry, Apollo, and the Artificial Intelligence Platform (AIP). The company has a market cap of around $335 billion for now.
After delivering a strong performance in the previous year, Palantir's shares have continued their upward trajectory in 2025. Despite a broader market selloff, the stock has managed to climb more than 94% year to date, making it the top-performing S&P 500 Index ($SPX) stock this year.
At the same time, Palantir's stock currently trades at lofty multiples. PLTR's forward price-earnings ratio stands at around 389 times earnings, reflecting very high growth expectations.
Palantir Technologies is expanding its defense business through a major new initiative called 'Warp Speed for Warships,' launched in partnership with the U.S. Navy and BlueForge Alliance. The program aims to connect shipbuilders, suppliers, and defense partners via a real-time digital network to improve delivery speed, coordination, and supply chain efficiency. Funded by the Navy's Maritime Industrial Base office, the initiative extends Palantir's focus beyond submarines to include surface warships. BlueForge's co-CEO said the effort provides U.S. industry with the digital tools needed to meet rising defense demands.
Beyond warships, Palantir is gaining traction with other defense contracts. The Pentagon raised its Maven Smart System deal with Palantir by $795 million in May, boosting the total to $1.3 billion through 2029. The company also landed a NATO Maven contract, signaling broader global adoption. Together, these deals reinforce Palantir's growing role in modern military technology.
On May 15, Palantir delivered first-quarter results that easily topped expectations across the board. Revenue surged 39% year-over-year to $884 million, with strong momentum in its core U.S. business. Domestic revenue jumped 55% to $628 million, fueled by a massive 71% gain in U.S. commercial sales, which hit $255 million. Government sales weren't far behind, rising 45% to $373 million.
Even more impressive was Palantir's profitability. The company posted GAAP operating income of $176 million, or $0.13 on an adjusted basis, good for a 20% margin, while net income came in at $214 million, or a 24% margin. Cash generation was also robust. Palantir pulled in $310 million in operating cash and $370 million in free cash flow, with conversion margins of 35% and 42%, respectively.
Management sounded upbeat about the year ahead, raising its full-year revenue forecast to between $3.89 billion and $3.902 billion, reflecting 36% growth.
Last week, Wedbush analyst Dan Ives reiterated an 'Outperform' rating on Palantir and raised his 12-month price target to $160, up from $140. The new target implies about 8.5% upside. Ives described Palantir as the 'Messi of AI,' citing a potential $1 billion opportunity in the U.S. commercial sector and continued strength in federal adoption.
However, most Wall Street analysts remain cautious. The consensus rating on PLTR stock is still 'Hold,' with many believing the stock has risen too far above its intrinsic value. Based on the average price target of around $106, analysts see a potential downside of around 28%.
On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com