Palantir announced their largest contract with a foreign government on September 17, during President Donald Trump’s visit to the United Kingdom as the company continues to expand beyond the U.S. government.
The UK military pledged to buy nearly $1 billion in Palantir’s software over the next five years as an extension to a pre-existing deal. The company also announced plans to make London its European headquarters for Palantir’s military business in the region.
“It will reinforce the UK’s position as a major military force protecting the West from our adversaries,” said Palantir CEO Alex Karp on the agreement. “And it will underline the UK’s status as our largest presence outside of the US.”
The contract is a part of a broader investment carried out by the country to deliver new jobs and growth within the national security apparatus and mirrors the increase in military spending among European Union member states since Russia’s invasion of Ukraine. The new contract is intended to support the implementation of AI models within data analysis, intelligence and targeting systems in the UK military.
It also comes on the heels of the “Technology Prosperity Deal” signed by Trump and UK Prime Minister Keir Starmer, in which both countries have pledged cooperation in several technological disciplines: artificial intelligence chief among them.
Palantir shares fell 1% after the news was announced. However, the stock regained all of those losses and then some to end the week 8% higher, extending this year’s gains to 396%.
“There will be volatility in the near term, and corrections are a natural part of any stock’s trajectory,” said Steve Jones, a stock market blogger and retail investor who has owned shares of Palantir since its IPO in 2020. “But I firmly believe Palantir is on track to reach a trillion-dollar valuation within the next three to five years.”
Since 2018, revenue for Palantir from the UK has increased by over 150%. The rest of the world outside of the UK have also consistently increased their business with Palantir, with revenues from other countries excluding the UK skyrocketing by 229% over the same time period.
However, the main chunk of their business comes from the U.S. government, with international customers making up an overall small part of the revenue stream.
“I don’t know if one contract in that regard moves the needle that much for Palantir,” said Analyst at DA Davidson and Co. Gil Luria referencing the UK deal.
Regardless, the upward trajectory of revenue piling in from sources other than the U.S. government is great news for a company that has increased its share price by 1,895% since being publicly listed.
“Palantir has the potential to be a trillion dollar market cap as the AI Revolution takes hold,” said Wedbush Analyst Dan Ives in his company report for Palantir. “The Messi of AI delivers game changing AI production use cases to solve problems faster while making enterprises more efficient and productive.”