Palantir Technologies Is Poised for Long-Term Performance

Stocks to buy

Palantir Technologies (NYSE:PLTR) offers data analytics software to clients. Established in 2013, the company works with government agencies to gather and analyze data to make decisions. Its clients include CIA and FBI. PLTR stock had a great start this year as its software was embraced by commercial clients.

A close-up shot of a hand and the Palantir (PLTR) logo.

Source: Ascannio / Shutterstock.com

Over the past few years, companies have understood the importance of data and it is changing the way business takes place. PLTR stock has shown volatility recently. It hit the high of $45 in January and is currently trading at around $23.

Despite the decline, the stock looks attractive to me. It is a long-term buy with long-term growth prospects. 

Considering the demand for data analytics in the country, the recent dip is a great opportunity to add the stock to your portfolio. Here’s why PLTR stock must be on your radar. 

Palantir Has a Huge Market

With a market cap of $32 billion, PLTR stock may look overvalued. The company has not reported any profit over the years but there is a massive opportunity to grow which justifies the valuation. Palantir’s business is highly relevant today as commercial enterprises have realized the importance of data.

The company is making strong moves across the market and has signed several contracts over the past few months. The company recently signed contracts with IBM (NYSE:IBM) and Amazon (NASDAQ:AMZN) AWS. It has only gained a part of the market share, which means there is tremendous growth potential.

Palantir reported more than $1 billion in revenue for 2020 and the fourth-quarter revenue stood at $332.1 million, which is up from $229.36 million a year ago. Having logged in 21 deals worth more than $5 million, Palantir is holding a strong position in the industry. The demand for data is only going up from here and the company has the right software to cater to the need. The company expects to hit $4 billion in revenue by 2024 at a growth rate of 30%.

The strong fundamentals, coupled with growth opportunities, make PLTR stock a great buy right now. 

Government Clients Mean Stability

Palantir has suffered a lot of backlash for focusing on government contracts, but what is wrong with it? The company is well-positioned in the industry as the provider of data analytics services to some of the top government agencies. The government sector generated 85% of the total revenue in Q4 2020 amounting to $132 million.  

The requirements from the government are only going to rise in the coming years. Palantir is already working with NHS, the public healthcare network of the UK, and there are no questions that it will soon become an integral part of the U.S. government. Recently, on April 22, the company was named as the Crown Commercial Service supplier in the UK.

Government contracts mean stability and consistent income.

The Bottom Line on PLTR Stock

Cathie Wood’s ARK Invest purchased 1.1 million shares of PLTR recently. This is not the first time that the investment firm has purchased PLTR stock.

The recent volatility in PLTR stock gives a perfect opportunity for investors who are looking to add it to their portfolio. There is a need to store and analyze a huge amount of data, and the demand for Palantir’s software is only going to increase. With one foot in the government sector and the other in commercial, Palantir Technologies is well-positioned to take on the market. It has a huge runway for growth in the next two years. 

I was bullish on Palantir in the past and I reiterate my bullish stance today. The company announces Q1 2021 results on May 18. 

PLTR stock is a long-term buy and hold. 

On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article.