Few companies have reacted more to Trump’s presidential election victory than Palantir Technologies (NYSE: PLTR), a data analytics and artificial intelligence (AI) company with a strong focus on defense and law enforcement. The company has added billions to its market cap, with shares up by a jaw-dropping 50% since the election.
But is Palantir’s recent rally based on hype and excitement or sustainable economic fundamentals? Let’s dig deeper into what the next 12 months could have in store for this unique technology leader.
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Founded in 2003, Palantir is arguably an early AI company. Its software-as-a-service platforms are designed to extract insights from large volumes of raw data to help organizations notice patterns, improve efficiency, and generate growth. The implementation of the large language model (LLM) technology behind algorithms like ChatGPT allows it to perform these tasks faster and deliver real-time insights.
This is a hugely competitive industry, with cloud computing giants like Microsoft, Snowflake, and Amazon offering similar services. However, Palantir seeks to differentiate itself with a focus on tailor-made solutions that can emphasize security.
The company offers its services through three core platforms: Gotham, Foundry, and the Artificial Intelligence Platform (AIP). Gotham helps government clients with decision-making, intelligence gathering, and military targeting. Foundry specializes in finding business efficiencies and trends for corporate clients, while Palantir’s AIP helps all types of organizations create and deploy AI applications.
If stock price trends are anything to go by, Trump’s presidential election victory has boosted optimism for Palantir’s stock. While stock moves don’t always have a tangible rationale behind them, this trend may have something to do with Palantir’s role in the previous Trump administration when it helped Immigration and Customs Enforcement (ICE) with tracking down and deporting undocumented immigrants.
The customized data analytics solution called Falcon (which Palantir created for ICE) uses data accumulated from government surveillance networks and public records to help agents plan future raids and operations. While the tools attracted a great deal of negative publicity from the media and activists, Palantir didn’t back down — allowing it to keep the contract and positioning it for future controversial deals.
