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to talk about sizzling artificial intelligence (AI) stocks without mentioning Palantir Technologies (NASDAQ: PLTR).The company's powerful suite of enterprise software platforms -- Apollo, Gotham, and Foundry -- has become indispensable for mission-critical operations, especially within the Department of Defense (DOD).Image source: Getty Images.As of the closing bell on Aug. 22, shares of Palantir have soared by 110% so far this year -- an eye-popping rally in what has otherwise been a choppy year for the market. At first glance, you might assume Palantir stock is already priced to perfection. Well, investors may want to reconsider.Below, I'll break down Palantir's latest government contract and explain why this deal is a game-changer for the company's growth trajectory at the intersection of AI and national defense.In the second quarter, Palantir generated $553 million in government revenue -- marking 49% growth year over year. Digging deeper, the company's public sector growth from U.S. agencies alone surged 53%, underscoring its increasingly central role in America's defense and intelligence ecosystem.This momentum shouldn't come as a surprise. Earlier this year, Secretary of Defense Pete Hegseth outlined a vision called the Software Acquisition Pathway (SWP) -- a strategy focused on quick deployment of the most effective enterprise platforms across the Pentagon.Palantir has been a clear beneficiary of the SWP. The company's Maven Smart System (MSS) contract expanded by $795 million, bringing the total deal value close to $1.3 billion. Furthermore, Palantir recently secured a new agreement with Immigration and Customs Enforcement (ICE) -- broadening its footprint beyond the battlefield.Perhaps the most underappreciated catalyst, however, is Palantir's ability to leverage its U.S. partnerships into opportunities with allies. Earlier this year, Palantir signed a contract with NATO -- a move that could lay the foundation to international growth as defense spending ramps up globally.Last month, the U.S. Army awarded Palantir a sweeping new Enterprise Agreement (EA) designed to create a "comprehensive framework for the Army's future software and data needs." Strip away the corporate jargon, and the scale of this deal becomes jaw-dropping.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,496.00 0.00 (0.00%)Dow Futures45,702.00 +60.00 (+0.13%)Nasdaq Futures23,609.00 -19.75 (-0.08%)Russell 2000 Futures2,390.00 +10.30 (+0.43%)VIX14.48 -0.37 (-2.49%)Gold3,463.30 +14.70 (+0.43%)PortfolioSign in to access your portfolioSign inTop gainersMDB MongoDB, Inc. 295.70 +81.36 (+37.96%)SATS EchoStar Corporation 58.76 +7.89 (+15.51%)NCNO nCino, Inc. 32.69 +4.00 (+13.94%)LUMN Lumen Technologies, Inc. 5.27 +0.58 (+12.37%)PCT PureCycle Technologies, Inc. 14.86 +1.26 (+9.26%)Top losersTIGR UP Fintech Holding Limited 11.57 -1.25 (-9.75%)NEGG Newegg Commerce, Inc. 60.89 -6.14 (-9.16%)LI Li Auto Inc. 22.60 -2.05 (-8.32%)KNF Knife River Corporation 82.76 -7.39 (-8.20%)SMMT Summit Therapeutics Inc. 24.81 -2.17 (-8.06%)Most activeWBA Walgreens Boots Alliance, Inc. 11.98 +0.06 (+0.50%)OPEN Opendoor Technologies Inc. 4.0200 -0.6800 (-14.47%)NVDA NVIDIA Corporation 181.60 -0.17 (-0.09%)PSNYW Polestar Automotive Holding UK PLC 0.4700 +0.3100 (+193.75%)NIO NIO Inc. 6.34 -0.36 (-5.37%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersNVDA NVIDIA Corporation 181.60 -0.17 (-0.09%)CRWD CrowdStrike Holdings, Inc. 422.61 +5.01 (+1.20%)SNOW Snowflake Inc. 200.39 +6.04 (+3.11%)LUMN Lumen Technologies, Inc. 5.27 +0.58 (+12.37%)CRWV CoreWeave, Inc. 96.93 +5.54 (+6.06%)Top economic events