The AI Bazooka Reloads: OpenAI's Mega-Deals Revolutionize the Market

Big Tech companies are leading the global economy and are heavily investing in AI infrastructure. Nvidia, Microsoft, Apple, Alphabet, Amazon, and Meta are trillion-dollar companies that are spending big on AI-related capex, with projected spending exceeding $250- to $300 billion annually. This has led to the creation of the "AI Bazooka," a financial superweapon aimed at expanding AI infrastructure, with OpenAI signing deals worth over $400 billion with Nvidia, AMD, Broadcom, and Oracle.

Palantir Technologies' (PLTR) stock has been on a remarkable upward trajectory in 2025, with shares hovering around $178-$180 as of October 17, 2025, after nearly tripling year-to-date (+300% in 2025), according to a ts2.tech report. This performance places Palantir among the top tech performers of the year, just below its all-time high of ~$190 reached in August.

The stock's surge can be attributed to a series of massive AI-fueled deals and strategic partnerships. In July, Palantir secured a monumental 10-year U.S. Army program worth up to $10 billion. This contract consolidates 75 separate Army programs under one umbrella, solidifying Palantir's role in military data systems. Additionally, a multi-year UK Ministry of Defence partnership worth £750 million to £1.5 billion was announced in September, further expanding Palantir's global footprint. In September, Palantir also formed a strategic alliance with Boeing's defense unit, integrating Palantir's AI-driven data platform into Boeing's operations.

In October, Palantir continued its deal momentum. It won a $385.4 million contract from the U.S. Department of Veterans Affairs and a $29.9 million task order from U.S. Immigration and Customs Enforcement (ICE). Furthermore, Palantir announced a partnership with Snowflake to integrate Snowflake's AI Data Cloud with Palantir's platforms, enhancing enterprise AI workflows.

Palantir's financial health has also been robust. Q2 2025 revenue jumped by 48% year-on-year to $1.03 billion, with $327 million in profit. This performance prompted management to raise full-year revenue guidance to ~$4.15 billion. The company turned profitable in 2023 and now boasts positive cash flow, which has reinforced bullish sentiment.

However, Wall Street is divided on PLTR. Some analysts have raised price targets above $200, viewing Palantir as an "AI arms dealer" positioned for years of growth. Conversely, skeptics warn that the valuation is "absurd," with noted short-seller Citron Research arguing fair value is only ~$65-$70. The consensus rating is a cautious "Hold," with the stock trading above the ~$155 median analyst target.

Palantir's valuation is indeed high, with a market capitalization around $425 billion, translating to 100×+ forward sales and over 200× earnings. This lofty pricing has fueled bubble concerns, despite believers touting Palantir's unique positioning in the AI boom.

Palantir's rise comes amid a broader 2025 tech rally driven by AI hype. The Nasdaq Composite has recently notched gains on blockbuster AI chip earnings, and traders betting on potential Fed rate cuts have further lifted high-growth tech stocks. However, a Bank of America survey indicates many investors fear an "AI bubble" may be forming, with Palantir often cited as a poster child of exuberance.

Palantir's stock has seen bursts of volatility, underscoring both the hype and the jitters surrounding it. For instance, a leaked U.S. Army memo raised alarms about security "flaws" in a battlefield network system that Palantir is helping develop. When news of the leak hit, PLTR plunged ~7.5% in a single day. However, the panic quickly dissipated as Palantir and its partner clarified that the memo referred to an outdated prototype and that the vulnerabilities had been fixed. By the next trading session, the stock bounced back ~3%, recovering much of the loss.

Palantir's stunning rally has been underpinned by a steady drumbeat of major contract wins and partnerships across government and industry. This momentum is expected to continue, given the company's strong position in the AI market and its expanding role in both defense and commercial sectors.

References

https://ts2.tech/en/palantir-pltr-stock-soars-300-on-ai-mega-deals-boom-or-bubble-ahead/