Planet Labs (PL -1.10%), a company that operates a constellation of satellites observing the Earth, saw its share price defy gravity on Thursday. The stock closed the day nearly 7% higher on news of the company being tapped to participate in a federal government program.
Watching from space
That program is being run by the Department of Defense's National Geospatial-Intelligence Agency (NGA). Planet Labs has been selected to participate as a vendor for the Agency's Luno B geospatial intelligence (geoint) initiative, which in the company's words "will enable NGA to lead the geoint enterprise in applying geoint artificial intelligence (AI), while delivering decision advantage to our warfighters, policy makers, and mission partners."
The project has a five-year base ordering period with a limit of $200 million. Planet Labs added that its chosen vendors will compete for future delivery orders.
Although that figure is fairly modest given typical levels of spending in defense-related projects from the federal government, it could make a real difference to Planet Labs' fundamentals. That is, if the company proves itself to be a reliable vendor of quality, useful imagery.
NYSE: PL
Key Data Points
AI assistance
It's more likely that investors were excited about the involvement of AI in the project. These days, any connection a company has with AI will bring it attention, as the technology has vast potential for all sorts of applications, across many different sectors and for a great variety of users.
I should caution here that Planet Labs is still a relatively young company and while it certainly has potential, recent revenue growth hasn't been overly impressive. As such, I feel it still has something to prove for the investment community.
