With the significant influx of artificial intelligence over the past few years, investors have jumped on several technology companies seen as potential winners in the field of AI. Palantir (NASDAQ: PLTR) is one of the most notable of these picks, with its stock price increasing 321% over the past year from $45 to $190!
But what is Palantir, and why did it experience such explosive growth? Senior Charlie Shape raised similar questions. When asked, he said, “I keep seeing it on my [TikTok] page, but I have no idea what [Palantir] actually does.”
The company was founded in 2003 as a Silicon Valley startup by numerous members, most notable of whom are Alex Karp, the current CEO, and Peter Thiel, a former PayPal founder and entrepreneur. It was originally founded to help U.S. intelligence agencies both organize and analyze data. Today, it follows a similar trajectory by selling software that manages large data sets. Its main platform, named Gotham, is a product of Palantir’s original mission, and helps defense and intelligence agencies collect data. Gotham software then analyzes that data using pattern recognition codes to see if it can flag suspicious or noteworthy activity. In other words, it is a major surveillance software for intelligence agencies. However, its applications are not solely limited to defense; Palantir has made major headway in commercial data integration. Its commercial software, named Foundry, helps large corporations organize extensive data sets and then runs modeling and forecasting software to provide key insights for these companies. Most of Palantir’s software employs artificial intelligence to aid in the process of data integration, and as with most AI companies, it has its own language model, AIP. While still in the developmental stages, the platform allows users to converse with artificial intelligence in a secure environment.
Palantir’s software is certainly surprising, but it does not fully explain the incredible stock explosion. Several companies use AI to analyze data, so what makes Palantir so special? Its main point of attraction is military contracts. The Russia-Ukraine conflict created a need for increased modern surveillance technology, and Palantir certainly fit the bill. In recent years, Palantir has secured over 75 military contracts with the U.S. Army, totaling approximately $10 billion, for a 10-year deal. It also holds numerous other contracts with various U.S. government agencies. Palantir has also exploded on the commercial scene, helping clients including Airbus, Amazon, AT&T, and several healthcare groups with large-scale, expensive data analytics projects. Senior Randy Chen says, “Even though the [stock] price is really high, I would still invest because there is not really a cap on its growth.” Randy’s opinions are similar to many of those currently in the investment industry as Palantir’s stock price continues to rise at unprecedented rates.
