FAA AI Rollout Creates New Opportunity for Palantir

Palantir (PLTR) stock was trading near $185 in Wednesday's premarket session, up about 0.1% from Tuesday's close.

Rosenblatt Securities maintained its Buy rating and $225 price target for Palantir, citing the company's potential role in the Federal Aviation Administration's (FAA) AI modernization effort.

The FAA has rolled out its SMART system, a Strategic Management of Airspace, Routes, and Trajectories system that uses AI to predict congestion and improve flight planning. While Air Space Intelligence holds the main $875 million SMART contract, Rosenblatt believes there could be room for multiple vendors as the FAA expands its use of AI.

Palantir already has an existing relationship with the FAA, having worked on aircraft safety monitoring following concerns around the Boeing 737 MAX in 2021. Rosenblatt estimates that earlier contract was worth about $18 million.