Palantir gains FAA role with new SMART system

Palantir Technologies is positioned to expand its government business as the Federal Aviation Administration begins deploying an artificial intelligence system to coordinate aircraft over Washington, D.C.

The FAA's Strategic Management of Airspace, Routes, and Trajectories, known as SMART, could open more agency work for Palantir, according to John McPeake, an analyst at Rosenblatt Securities. McPeake maintained a Buy rating on the stock with a $225 price target.

Palantir first partnered with the FAA in 2021 to provide aircraft safety monitoring following the Boeing 737 MAX crashes. McPeake expects the agency to broaden its use of Palantir's platform to additional safety tasks.

Public sector contracts remain core to the business, representing 51% of second-quarter sales, while commercial revenue rose 110% year over year. McPeake projects earnings per share will surge 119% this year and grow at a 73% compound annual rate through 2030, with his $225 target valuing the company at roughly 60 times projected 2027 earnings.