Planet Labs' (PL) record backlog is bolstering its growth outlook, supported by rising demand across defense, intelligence and satellite services, Morgan Stanley said Wednesday in a report.

Backlog reached about $900 million, driven by an expanding pipeline in satellite services, including growth in both deal count and average deal size, the report said. Planet Labs is well positioned to capture increasing sovereign demand, particularly in Europe, Morgan Stanley said.

Planet Labs outlook points to strong revenue growth and lower margins, reflecting a shift toward satellite services and AI-enabled solutions as well as continued investment in fleet expansion and AI capabilities, the report said.

Morgan Stanley raised its price target on Planet Labs to $35 from $26 with an equal-weight rating.

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