Wedbush: Collaboration with Microsoft(MSFT.US) will be a "springboard" for Palantir's (PLTR.US) AI platform
1min read Wedbush Securities said Palantir (PLTR.US) and Microsoft (MSFT.US) signed an agreement this week to provide artificial intelligence services to the defense and intelligence community, which could "change the game" and potentially serve as a "launchpad" for Palantir's artificial intelligence platform (AIP). The firm maintained its overweight rating and $38 price target on Palantir.
Analyst Dan Ives wrote in a note to investors: "With this major deal cemented and Microsoft leveraging Palantir's AI and large language model capabilities for the US government, Microsoft is accelerating the pace of AI adoption while Palantir continues to accelerate the adoption of its AI platform in the federal space. We believe this will be the launchpad for Palantir's AIP story over the next 12-18 months into the DoD and broader ecosystem."
Under the agreement, the companies will integrate Microsoft's large language models, such as Azure OpenAI services, with Palantir's AI platform in Microsoft's government and classified cloud environments.
The product will include Microsoft's Azure cloud computing and large language models, such as OpenAI's GPT-4, with Palantir's Foundry data integration and classification capabilities, and its AI platform. The companies said it would help agencies run safe, secure and responsible AI-driven operations in the defense and intelligence verticals.
Ives added that while Palantir has been able to develop its federal business (and its enterprise business), the deal could add "momentum" to its federal business in the coming years.
"This is a key partnership that provides an enhanced product suite of advanced AI capabilities for the US government to deploy safely, securely and responsibly," he said. "With still many government agencies looking to leverage AI model integration to improve operational workload, this partnership will continue to generate further momentum in the federal space over the next few years."