Palantir Technologies Inc (NASDAQ:PLTR) shares are hitting new highs on Tuesday. Here's a look at what's going on.

What To Know: Palantir shares are up more than 380% since the start of the year, driven largely by the company's positioning in the AI space.

The rally in Palantir shares accelerated at the beginning of November after the company reported strong quarterly results driven by "unrelenting" AI demand.

Revenue jumped 30% year-over-year on continued strength in the U.S. and customer count grew 39% after the company closed 104 deals worth over $1 million during the quarter.

"The growth of our business is accelerating, and our financial performance is exceeding expectations as we meet an unwavering demand for the most advanced artificial intelligence technologies from our U.S. government and commercial customers," Alex Karp, co-founder and CEO of Palantir, said in a letter to shareholders last month.

Over the weekend, the Financial Times reported that Palantir and defense technology company Anduril are communicating with several competitors about the potential of forming a consortium to make a joint bid on U.S. government contracts.

The report indicates that SpaceX and OpenAI are among the companies in talks to join. The group is planning to announce itself publicly as soon as January, people with knowledge of the matter said.

"We are working together to provide a new generation of defense contractors," one person involved in organizing the group reportedly said.

The Financial Times further reported that tie-ups between some tech groups expected to be involved with the consortium have already started. Palantir's AI platform was integrated with Anduril's autonomous software earlier this month and Anduril has linked its counter-drone systems with OpenAI models.

Palantir announced last week that it extended its long-standing partnership with the U.S. Army through 2028. The four-year agreement extension is valued at more than $400 million and has a total available ceiling of approximately $619 million.

By leveraging Palantir's software, the U.S. Army is able to create AI-enabled data solutions to analyze information from multiple data sources, enabling operational efficiencies and optimizing business processes.

PLTR Price Action: Palantir shares were trading at all-time highs at last check. The stock was up 1.31% at $81.79 at the time of publication Tuesday, according to Benzinga Pro.

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