Does Palantir's Massive Military AI Score Justify Buying the Stock at These Prices?

Palantir Technologies (NASDAQ: PLTR) has worked closely with the U.S. government for more than a decade. The government is already Palantir's largest customer, accounting for $2.4 billion of its total $4.47 billion of revenue in 2025.

The company recently reached a major new milestone. The Pentagon formalized Palantir's Maven Smart System as an official program of record. Maven is an artificial intelligence (AI) system that ingests data from drones, intelligence reports, satellites, and other sources to identify potential targets and threats or to aid decision-makers during missions.

Here is what this designation could mean for Palantir's outlook and whether that justifies buying the stock now.

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This new military designation is a big deal

The military has been using Maven since 2017 on a contract-to-contract basis. As a program of record, the military is formally integrating Maven into its ongoing operations. You could consider the military's prior usage as an extended trial and this new designation as the government officially signing up for long-term membership.

Last year, the U.S. Army awarded Palantir an enterprise agreement worth up to $10 billion over a decade. As a program of record, Palantir is more likely to realize the high end of that contract's value. The designation also serves as a green light to expand Maven's use across other military branches, strengthening its competitive position for future contracts.

Is the stock worth paying up for, though?

This positive catalyst for Palantir's government business is yet another tailwind development for a company that continually executes at a high level. The company's commercial business has surged since it introduced its AIP platform for AI applications in 2023.

Investors have continued to bid Palantir stock higher over the past couple of years. It's been well-earned but has also pushed shares to nausea-inducing valuations at times. Palantir has fallen about 30% from its high amid recent market volatility. Even still, it's one of the most expensive stocks on the market at 82 times trailing-12-month revenue.

In all fairness to Palantir, few companies are growing so fast from a multibillion-dollar base. Analyst estimates imply 62% revenue growth this year and 30% the following year, reaching $10.4 billion in 2027.

Data by YCharts.

That values the stock at about 34 times 2027 revenue estimates. That's a bit far out from April 2026, but it shows how explosive growth can quickly burn off a premium if your holding period is years rather than months.

Palantir's government revenue already grew by 53% in 2025, but with Maven formally designated as a program of record, there's a solid chance that growth can continue for a while. The war in Iran and consistent geopolitical tensions only underline that.

The stock could plunge in a bear market due to its sky-high valuation, but otherwise, Palantir continues to look like a long-term winner in the AI era. Investors can begin to consider buying the stock, though it may be wise to nibble and leave some cash in case the stock offers even better buying opportunities in the future.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.