Why Palantir Stock Popped Today
Key Points
Palantir will participate in the upcoming U.S. Army "Right to Integrate" hackathon.
Palantir's government sales just grew slower than commercial. An Army win could change that.
After two days of falling share prices post-earnings, defense technology giant Palantir (NASDAQ: PLTR) stock is getting back on the horse Thursday, and as of 11:40 a.m. ET its stock is up 4.2%.
You can thank the U.S. Army for that -- and hackers.
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Palantir's Hackathon
Palantir announced this morning that it will participate in an upcoming "hackathon sprint" hosted by the U.S. Army. It won't be the only defense company participating; according to an Army press release, everyone from Anduril to Boeing (NYSE: BA), General Dynamics (NYSE: GD), L3Harris (NYSE: LHX), Leidos (NYSE: LDOS), Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: RTX), and RTX Corp (NYSE: RTX) have also been invited.
But Palantir has a special reason to want to participate and show off its technical chops.
Last quarter, Palantir hit its highest-ever year-over-year growth rate of 85%, but two factors may still be worrying investors. First, Palantir warned that new contracts grew more slowly than sales (yielding a book-to-bill ratio under 1.0), and full-year sales may grow only 71% this year.
And second, government sales in particular grew more slowly than commercial sales -- only 76% for government, versus 95% for commercial, according to data from S&P Global Market Intelligence.
Why Palantir wants to enlist in the Army
A big win with the U.S. Army could help shift this dynamic and reaccelerate government sales growth. And here's the best news:
According to the Army, the aim of its "Right to Integrate" hackathon is to "ensure offensive and defensive weapon systems, and business systems across the Army, can collectively integrate, share data and communicate with each other." This objective plays right to Palantir's strengths.
If Palantir's looking for a place to grow faster, I think they just found it.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, L3Harris Technologies, Leidos, Palantir Technologies, and RTX. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.