Palantir Technologies Inc. (NASDAQ:PLTR) stock jumped 3% Wednesday after Rosenblatt argued the Federal Aviation Administration’s new AI rollout could still benefit the company, even though Palantir lost the $875 million modernization deal tied to it.
Rosenblatt analyst John McPeake reiterated his Buy rating and $225 price target as the FAA began deploying SMART, an AI-supported air traffic management system, around Washington, D.C.
Palantir Lost the Deal, Not the FAA
The FAA awarded Air Space Intelligence the 12-year, $875 million deal, covering the agency’s Flow Management Data and Services platform and SMART.
But McPeake argues the FAA opportunity for Palantir goes well beyond one air traffic management contract.
The FAA first selected Palantir Foundry in 2021 under an $18.4 million deal covering aircraft certification and safety monitoring, including the Boeing 737 MAX’s return to service.
What happened this year may be more telling.
The FAA sought additional Foundry licenses and services and received 51 responses to a market survey. Ten vendors met its broad requirements and two made it to further evaluation.
Palantir was ultimately the only vendor the FAA said could plug into its existing systems without significant new development.
Switching to another provider would mean rebuilding integrations, moving operational data and retraining staff, creating added costs and delays, the agency said in its notice.
That existing foothold helps explain McPeake’s bullish view even after Palantir lost SMART.
It also matters financially. Palantir reported $809 million in U.S. government revenue in the second quarter, up 90% year over year and ahead of its $764 million U.S. commercial business.
Burry Bets Against Palantir
Not everyone is convinced.
A day before Wednesday’s rally, Benzinga reported that Michael Burry added to his bearish bet against Palantir, alongside short positions in Micron, Nebius and the iShares Semiconductor ETF. The "Big Short" investor has repeatedly questioned Palantir’s valuation and accounting.
The timing also invited speculation that short covering may have fueled Wednesday’s rise. Janney strategist Guy LeBas appeared to allude to the trade on X, warning that publishing widely followed long and short positions can put a target on subscribers’ backs as stop-loss hunting algorithms move in.
Traders Bet on More Upside
Polymarket traders give Palantir about a 52% chance of touching $198 before September ends, according to a contract with roughly $34,400 traded.
Each level resolves yes if PLTR trades at or above that price during regular market hours before month-end. Traders put the chances of $204 and $210 at about 28% and 13%, respectively.
Rosenblatt’s $225 target sits above every upside level offered in the market.
At $190.67 Wednesday, PLTR would need to gain about 3.8% to reach $198.
PLTR Price Action: Palantir shares were up 3.1% at $190.67 at the time of publication Wednesday, according to Benzinga Pro.
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