Palantir (NYSE:PLTR) stock is a thoroughbred growth stock. It has an asset-light business model, solid government contracts, and a staggering amount of cash.
In recently reported earnings, it hit the ball out of the park once again. Both revenue and earnings figures beat analyst estimates. And guidance was also upbeat. Then why has PLTR stock lost a third of its value in a recent sell-off?
Well, here is where it gets interesting.
Investors are demanding when it comes to Palantir. They saw the potential, and they liked it. After all, that is what drove them in droves to the stock when it made its colossal debut last year. Much like every other tech IPO these days, investors made money hand over fist.
But there are a few things peeving stockholders. First, they want the commercial business to start producing the goods. Palantir has an excellent record when it comes to government contracts. But the commercial business is not as successful. Investors want diversification in the revenue mix. Hence, it is a major factor affecting investor sentiment.
Potential regulatory activity is the other issue hanging over PLTR stock like a dark cloud. Due to the close association of Palantir and the defense establishment, certain members of Congress have taken issue with the big data company. In particular, the company’s contracts with the U.S. Immigration and Customs Enforcement (ICE) have come under fire.
However, Palantir is a solid enterprise that is consistently expanding. For example, Palantir has developed a new service that will support compliance regulations for cryptocurrencies. Cryptocurrencies are a hot commodity with an exciting future ahead. With cryptocurrencies being so popular and institutional adoption legitimizing this new industry, it is a potential game changer. The rest of its business is also growing nicely.
Palantir’s Expanding Commercial Business
Palantir offers multiple products to companies and governments for improving information gathering, operational capabilities. Its various platforms have wide applications across industries. The U.S military and other government agencies use Palantir’s investigative analysis capabilities to solve crime in America, abroad, or anywhere where users can apply its data-driven software.
The use of AI in government is widespread. With their Gotham platform, large organizations like Palantir have made it possible for them to integrate massive amounts of data into one operating system, which these powerful programs can then analyze – it allows analysts to perform due diligence on a massive amount of data at lightning speed.
Palantir’s Foundry option is a simple data pipeline that brings together back-end and front-end information so you can access it with ease. This breaks down barriers to understanding. It is especially helpful for those who need help managing or analyzing large sets on their own, whether they’re in corporate America looking at customer relationships across departments or an intelligence agency trying to make sense of unforeseen threats before they happen.
Palantir is expanding its Foundry offering in a big way. The company rolled out “Foundry for Builders,” an end-to-end analytics platform targeting startup companies. Palantir has added 10 more companies to its Foundry for Builders SaaS platform in October of this year – startups from all over are now using it as their go-to growth accelerator.
Foundry for Crypto and What It Means for Palantir
Palantir’s newest service offering, Foundry for Crypto, can help banks and fintech startups with compliance rules while also verifying customers against suspected money-laundering activities. The platform will do whatever it can to help its clients succeed and bring crypto into a more legitimate light by providing them with peace of mind and security through regulations.
Foundry for Crypto could fuel Palantir’s growth in the commercial segment. The company has seen improvement with its commercial business already. It has already announced new products meant to support startups and innovation of different kinds – such as Foundry for Builders.
Palantir continued its strong performance in the third quarter with 37% growth in the commercial segment leading to a revenue figure of $174.3 million. With the recent addition of Foundry for Crypto, it is clear that Palantir sees an opportunity in providing services to this emerging market. This move could help them grow their revenue exponentially, considering the nature of the crypto world. Regardless of what you think about this investment space, no one can argue against its gains.
The future of Palantir is bright, with new opportunities in the private enterprise market set to change its revenue source drastically. Palantir is experiencing a lot of growth, and its service offerings are seeing increasing customer uptake. With new clients signing on for Palantir’s predictive analytics software every day, the future is bright.
Future Looks Bright for PLTR Stock
The introduction of Palantir’s Foundry for Crypto could not have come at a better time. Cryptocurrencies are finally being recognized as an asset class on par with other traditional currencies. It will only help its adoption grow moving forward. Foundry for Crypto is a new opportunity to enter an emerging market projected to grow exponentially. Outside of China, cryptos have not had to deal with any major regulatory activity. It opens up an attractive market that its user base can enjoy.
Institutional adoption will create a whole new frontier for big data analytics and the continual development of the crypto ecosystem. Foundry for Crypto sees strong customer interest with banks, fintechs and startups. If you combine all these entities, it is a huge market to tap. Assuming the trend continues unabated, Palantir could be on its way to an acceleration of revenue growth. That will, in turn, lead to positive price momentum for PLTR stock.
There is also no overt threat of intense regulatory activity. Palantir has shown time and again that it commands the respect of America’s major defense agencies. Ultimately, any reservations certain members of Congress might have with Palantir will not stand on solid ground if the company is best suited for a job.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. He writes regularly for InvestorPlace and also contributes to TipRanks.