PLTR Stock Price Increases 139.4% Over The Past Month: Why It Happened

By Amit Chowdhry ● November 24, 2020
  • The stock price of Palantir Technologies Inc (NYSE: PLTR) increased 13.21% on Tuesday, November 24, which extends an overall rally of 139.4% over the past month. This is why it happened.

The stock price of Palantir Technologies Inc (NYSE: PLTR) —  a big data analytics company founded by Peter Thiel, Nathan Gettings, Joe Lonsdale, Stephen Cohen, and Alex Karp — increased by 13.21% on Tuesday, November 24, which extends an overall rally of 139.4% over the past month.

Palantir is known for having clients in the private and public sectors. And the company’s technology is used for detecting explosive devices in war zones and improving automotive manufacturing. And some clients have used the company’s tools for tracking personal information such as license plate numbers, social media accounts, bank records, and Social Security numbers.

Palantir offers two main products for analyzing data, including Palantir Gotham and Palantir Foundry. Palantir Gotham is a customized option that is used by government agencies, law enforcement, and many companies — which integrates and transforms data regardless of type or volume into a single data asset. And Palantir Foundry — a platform that removes barriers between back-end data management and front-end data analysis — is used by companies in a wide range of industries including automotive and pharmaceutical.

Palantir’s software has been used by government agencies and companies for major events such as the conviction of Bernie Madoff (Ponzi scheme), disaster recoveries, and the fighting of child exploitation.

And the company’s software has been used to help the U.S. military track IEDs planted in Afghanistan. Plus Palantir is used by the Salt Lake City Police Department to help officers reduce the complexities of investigations.

But one of the more controversial aspects of Palantir’s platform is how it is being used by the U.S. Immigration and Customs Enforcement’s (ICE). Palantir is being used to find people in the country who are undocumented.

These are some of the reasons why the stock price has been rallying over the past month:

Earnings Report (November 12)

On Thursday, November 12, Palantir has reported its first earnings report after the closing bell. And it beat analyst expectations at the top and the bottom line for the fiscal third quarter.

For the quarter, the company reported $289.4 million and expectations were below $280 million. Palantir’s revenue for the quarter increased by 52% and the fiscal year 2020 guidance was increased. The losses per share were $0.94. The non-GAAP operating income for the quarter (adjusting for costs of the recent stock listing) was $73.1 million. 

Palantir is expecting Q4 revenue to be 31% higher compared to last year. And the company forecasted $44 million to $50 million in adjusted operating income. In terms of the 2020 full-year revenue, Palantir is expecting revenue to be up 44%. 

During the quarter, Palantir said that it closed 15 deals with new and existing customers, each being worth $5 million or more in total contract value. Some of these contracts were with the U.S. Army and National Institutes of Health along with a contract renewal with one of the largest aerospace companies worth $300 million in total contract value over 5 years.

Investor Reports (November 13)

On November 13, Royal Bank of Canada and Jefferies Financial Group both boosted their price targets of Palantir. Royal Bank of Canada had increased its price target from $11 to $15 and Jefferies Financial Group increased its price target from $13 to $18. 

Royal Bank of Canada analyst Alex Zukin cited the strong Q3 results and the 9-figure contract renewal along with several 8-figure deals. And Jefferies analyst Brent Thill is keeping a “Buy” rating on the shares following the beat-and-raise report and noted that government contracting can be supplemented with acceleration in commercial contracts.

13F Filing Reveals Hedge Fund Investors (November 17)

On November 17, it was reported that a number of renowned hedge funds had major positions in Palantir. For example, Point72 Asset Management LP (Steve Cohen’s hedge fund) has 29.9 million shares of Palantir, valued at over $284 million. BlackRock has 29.3 million shares valued at $278.34 million. The Canada Pension Plan Investment Board owns 24.16 million shares valued at $229.49 million shares. And Soros Fund Management has 18.46 million shares valued at $175.35 million. 

However, Soros Fund Management — the asset management company founded by George Soros — disclosed that it is planning to sell its stake as it “does not approve of Palantir’s business practices.” 

“SFM made this investment at a time when the negative social consequences of big data were less understood. SFM would not make an investment in Palantir today,” says a statement from Soros Fund Management about the Palantir investment. 

US Army Futures Command Prototype Contract (November 18)

On November 18, it was announced that it was selected by the US Army to receive one of two prototype contracts for the Common Data Fabric and Data Security solution to support network design experimentation for the Army’s next network modernization set of technology, termed Capability Set 23.

This is the first time that 

Palantir’s Gotham software is being integrated with the Army’s latest mission command software application, called the Command Post Computing Environment (CPCE). CPCE is now being fielded across the force, thus providing commanders with better visualization tools, common applications, and new server infrastructure. And the prototype will work at the intersection of intelligence, mission planning and execution, providing a single, integrated solution to give commanders a global operational picture to make better data-driven decisions.

“We’re excited to partner with the N-CFT, and the PEO-C3T, on this important mission to modernize the Army’s Mission Command capabilities,” said Palantir’s Global Defense lead Doug Philippone. “The Army’s proactive approach in seeking out opportunities to deploy commercially-available solutions has been instrumental in getting critical capabilities into the hands of warfighters faster.”

Disclosure: I have a very small position of PLTR in my stock portfolio