The Hidden Opportunity in FTAI Aviation: How Palantir AI Powers a 219% Rally

While Palantir dominates headlines as a high-flying AI stock, there’s a lesser-known company benefiting from similar artificial intelligence trends that’s delivered even more impressive returns. FTAI Aviation, which has surged 219% over the past year, offers investors a backdoor entry into cutting-edge AI technology through its strategic partnership with Palantir. Recent collaborations with both Palantir and GE Aerospace have fundamentally reshaped the investment narrative for this overlooked stock.

The Engine Maintenance Business: FTAI’s Foundation

FTAI Aviation’s core competency lies in acquiring, maintaining, and servicing commercial aircraft engines for airlines, cargo operators, and leasing companies. Rather than competing directly with original equipment manufacturers, the company has carved out a profitable niche by offering cost-effective maintenance solutions once manufacturers’ long-term service agreements expire.

The company specializes in two legacy engine models: the V2500 and the CFM56. The CFM56, jointly produced by CFM International (a partnership between GE Aerospace and Safran), powers the venerable Airbus A320 family and earlier Boeing 737 variants. This focus on mature, high-volume engines creates a durable business model with predictable demand. For airlines facing budget pressures, FTAI’s lower-cost maintenance represents meaningful savings compared to OEM pricing.

The competitive yet cooperative dynamic with GE Aerospace is particularly interesting. While FTAI provides alternative maintenance pathways, it also benefits when GE extends the operational lifespan of CFM engines—and GE has done exactly that. Management has pushed back expectations for declining CFM56 shop visits (major overhauls) from 2025 to 2027, citing robust airline demand. This extension essentially grants FTAI more years of high-volume service opportunities.

Strategic Partnerships: De-Risking the Growth Story

FTAI’s dealmaking has accelerated meaningfully, and these aren’t routine transactions. In a significant move, the company secured a multiyear agreement with CFM International covering OEM replacement parts, thrust performance upgrades, and component repairs. This formalized partnership locks in supply and extends the useful life of CFM engines—a clear win for maintaining the maintenance pipeline.

But the partnership strategy extends well beyond traditional aerospace suppliers. In November, FTAI established a multiyear strategic alliance with Palantir, the AI powerhouse, to integrate Palantir’s advanced artificial intelligence technology into its operations. The goal is explicit: achieve faster production turnaround times and improved unit economics while delivering greater cost savings to customers worldwide.

These collaborations matter because they reduce execution risk. Partnering with industry titans like GE Aerospace and Palantir validates FTAI’s business model and creates barriers to competition.

FTAI Power: Where AI Meets Data Center Demand

Shortly after signing with Palantir, FTAI announced a major new business division: FTAI Power. This initiative converts CFM56 engines into power turbines designed to supply energy to data centers—a sector experiencing explosive growth driven by AI infrastructure demands.

Here’s where the Palantir AI integration becomes genuinely strategic. FTAI plans to produce over 100 power units annually by applying its modular maintenance methodology to the new turbine business. That manufacturing efficiency almost certainly depends on Palantir’s AI platform to digitally model each power turbine, predict maintenance requirements, and optimize parts availability. In essence, AI doesn’t just help FTAI—it becomes embedded in how the company manufactures and services an entirely new product category.

This positions FTAI to capture multiple tailwinds simultaneously: aging aircraft engine servicing, growing installed bases of CFM engines, and surging data center power demand from artificial intelligence applications.

The Valuation Question and Investment Perspective

Trading at 43 times forward earnings, FTAI Aviation doesn’t come cheap. The stock trades at a premium multiple that reflects high growth expectations. This isn’t a screaming bargain for value investors hunting for deep discounts.

Yet the premium valuation may be justified given the growth runway ahead. FTAI operates in two expanding markets—traditional aircraft engine maintenance and the newly launched power turbine business—both supported by tailwinds (airline fleet utilization and data center expansion). The strategic relationships with Palantir and GE Aerospace reduce uncertainty around execution and technology adoption.

The partnership strategy deserves particular emphasis. When a company can credibly claim that Palantir’s AI platform enhances its core operations while simultaneously creating a new revenue stream in FTAI Power, the investment case shifts from speculation to strategic positioning.

For investors considering entry points, current levels may represent a reasonable opportunity, though patience during any market-driven pullback could offer more attractive positioning. Either way, FTAI Aviation warrants monitoring as a genuine intersection of AI adoption, strategic partnerships, and secular industry growth.