Palantir: A Bet on Geopolitical Unrest and Government Spending – August 12, 2024

Palantir ((PLTR – Free report) ) is a unique and highly secretive company specializing in software, security, and artificial intelligence (AI) solutions. The company’s largest customers are governments and financial institutions. Government use cases include counterterrorism, intelligence analysis, and security and privacy.

Palantir Gotham

Palantir Gotham is Palantir’s software used for intelligence and defense purposes for counterterrorism. The United States Intelligence Community (USIC) and the Department of Defense (DoD) are among the largest customers.

Geopolitical tensions are increasing

The ongoing conflicts are increasing worldwide, especially in Europe and the Middle East. Even if the US is not directly involved in these conflicts, our indirect involvement will help to maintain the revenues of the US government.

For example, the war between Ukraine and Russia appears to be escalating as Ukraine goes on the offensive and crosses the border into Russia. A Ukrainian nuclear power plant caught fire over the weekend. Meanwhile, Israeli forces intercepted missiles crossing from Lebanon last night. The wars are escalating so quickly that the US has sent a nuclear-powered submarine to the Middle East.

Defense spending is highest ever

Military spending in 2023 was the highest ever for the United States. To put the skyrocketing spending in perspective, the U.S. spent $916 billion for the year, more than the nine next-highest-ranking countries combined.

Image source: National Priorities Project

While counterterrorism and defense are Palantir’s core businesses, the company also provides services to big names such as Morgan Stanley ((MADAM – Free report) ) And Merchandise ((MRK – Free report) ). These services include:

Facts

Palantir helps organizations integrate large and diverse data sets from different sources. PLTR’s software is known for processing huge amounts of data and making connections between different data sets simultaneously. In other words, the company helps organizations simplify and understand complex data sets. The company’s software is highly sought after because it transforms data into interactive visualizations.

Security and privacy

Palantir is known for its high-quality customer base and best-in-class security measures.

AI and machine learning

Palantir’s AI and machine learning capabilities enable customers to apply advanced predictive analytics to their data findings.

A bet on government spending

Although Palantir is highly secretive, a 2013 TechCrunch report revealed that Palantir has at least a dozen clients within the U.S. government, including the CDC and the FBI. With both parties unwilling to cut government spending, a government contractor like PLTR is a prime place to be.

Image source: Federalbudgetinpictures.com

A+ Founding Team

The term “Paypal Mafia” refers to a group PayPal ((PYPL – Free report) ) employees and founders who went on to become successful entrepreneurs, venture capitalists, and technology executives. Peter Thiel, one of Palantir’s founders, is one of the group’s best-known and most successful. Thiel was the first outside investor in Meta platforms ((META – Free report) ), Formerly Facebook. A solid founding team should act as a vote of confidence for potential investors.

Post EPS setting

PLTR is showing relative price strength and a bullish weekly engulfing candle.

Image source: TradingView

Robust earnings history

Last week, Palantir reported 23% year-over-year earnings growth. PLTR is one of the best growth stories in the market, growing its top and bottom lines by double digits since December 2022.

Conclusion

Palantir is one of Wall Street’s best growth stories, and should be a big beneficiary of rising geopolitical tensions and skyrocketing government spending.