The data mining and artificial intelligence (AI) specialist announced several new contract wins, suggesting the adoption of AI continues to gain steam.

Palantir reported several new contracts during July, and two in particular are noteworthy.

First, Palantir announced its Warp Speed for Warships program designed to help the U.S. Navy "accelerate warship production, fleet readiness, and digital transformation." By digitally connecting the network of shipbuilders, suppliers, and critical partners, the program will use data to modernize communication and coordination.

The other important contract is with the U.S. Army. What made this deal particularly noteworthy is that it could be worth as much as $10 billion over the coming decade, making it Palantir's largest signed contract to date. The agreement combined 75 individual contracts into a single enterprise deal, establishing a "comprehensive framework for the Army's future software and data needs."

These contracts also helped fuel bullish sentiment among several Wall Street analysts. Analysts at Piper Sandler initiated coverage on Palantir at an overweight (buy) rating, assigning a price target of $170 (the stock has since eclipsed that benchmark). The analysts cited Palantir's "one-of-a-kind growth," suggesting the company can deliver a revenue run rate of $24 billion by 2032.

Analysts at Loop Capital were similarly bullish, maintaining a buy rating and increasing their price target to $178 (the stock has since surpassed that benchmark as well). The analysts said they expected Palantir to deliver a beat and raise quarter when it reported in early August (it did).

Bears are quick to point out Palantir's egregious valuation, and rightfully so. The stock has a price-to-earnings (P/E) ratio of 616 and an only slightly more palatable 218 times next year's earnings. With multiples of that magnitude, the stock is subject to extreme volatility, and some investors suggest that the stock will never grow into its valuation.