Why Planet Labs Stock Surged Almost 7% Higher Today

Planet Labs (NYSE: PL), 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."

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

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.

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.

Should you invest $1,000 in Planet Labs Pbc right now?

Before you buy stock in Planet Labs Pbc, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Planet Labs Pbc wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $901,323!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Learn more »

*Stock Advisor returns as of January 21, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.