$Palantir Technologies(PLTR.US)$ is known for secrecy and its long list of government clients. Its shares haven't moved much in the past 6 months. PLTR stock was trading at $23 in April and is trading at the same level today. 

Despite signing new contracts and moving in the right direction, the company's shares are not surging. This is puzzling, as PLTR stock has long-term potential and the ability to generate solid returns for investors. With that in mind, let's take a look at my investment case for PLTR stock. 

A U.S. Army Contract Bodes Well for PLTR Stock

Palantir was selected for an $823 million U.S. Army Intelligence program contract. Per the terms of the agreement, the company will provide its Gotham platform to the military branch to support users around the world.

The company stated that this is one of the many projects it is working on for Army Intelligence. In addition to these ventures, Palantir also has a $111 million contract with U.S. Special Operations Command.

A major part of the company's revenue comes from the military, and this contract is proof that the U.S. government trusts Palantir and its software. It is no small feat for a company to bag contracts from the defense industry.

Palantir also has the skills and expertise to capture revenue through its software. The National Institute of Health has awarded the company a contract to continue providing a cloud-based data enclave for the centralization of Covid-19 data. The two-year, $59.5 million contract has an initial task order for $7.9 million in the first five months. 

Palantir's Strong Revenue and Cash Flow

These government contracts can give a revenue boost to the company in the short term, which will take PLTR stock higher. 

Palantir has solid free cash flow (FCF) and minimal debt. It has significantly improved its cash flow and generated $201 million at the end of the second quarter.

The company incurs heavy expenses towards research and development in addition to building custom solutions for clients. It is also investing a huge amount in acquiring new customers. However, I do not think Palantir will run out of cash for several years. 

At the end of the second quarter, management increased its guidance for FCF. Initially, they expected free cash flow of $150 million at the end of the year. Now, the company expects to see at least $300 million in FCF.

Management will only increase guidance when it is confident the company can meet the updated expectations. The rise in forecasted cash flow proves the company is doing something right and the business is turning profitable. 

If You're Willing to Wait, Buy PLTR Stock

It hasn't moved much in the past year, but PLTR stock has strong growth potential for patient investors. Do not expect the stock to double in the next few months. Buy PLTR shares only if you are ready to hold them for the long term. 

Investors can expect a large chunk of its revenue to continue coming from government contracts. And as long as the company is profiting, there's nothing wrong with that. But for those who remain unconvinced, Palantir is also increasing the number of commercial clients it serves.

While I do not think PLTR stock will soar to new all-time highs, I do believe its recent contracts will give a push to the stock and its shares will see an upside.