Palantir Technologies (NYSE: PLTR) is emerging as a prominent player in the artificial intelligence (AI) sector. Over the years, Palantir marketed three data-analytics software suites: Foundry, Gotham, and Apollo.
In April last year, Palantir unveiled its latest flagship offering: the Artificial Intelligence Platform (AIP). The launch was remarkably successful, enabling the company to venture beyond its traditional focus on government contracts.
This recent expansion, alongside the excitement surrounding AI, led to a 167% surge in share price last year. As the stock climbed another 24% in 2024, some investors may feel they missed the opportunity to invest in Palantir.
My perspective differs. Let’s discuss why Palantir still presents a compelling investment opportunity for long-term investors.
It’s Not a Return
For a considerable period, Palantir heavily relied on substantial government contracts from the U.S. military and its Western allies before its late 2020 IPO. This reliance led some critics to view Palantir more as a consultancy or government contractor rather than a genuine software-as-a-service (SaaS) entity. Furthermore, when growth in the government sector began to slow down in 2022, the stock plummeted by almost 65%.
Struggling at the end of 2022 with shares hitting a record low of just $6, Palantir was facing a challenging situation as an enterprise software developer. However, the company displayed remarkable resilience last year, essentially reinventing itself amidst the AI transformation.
After the introduction of AIP in 2023, Palantir initiated immersive workshops named “boot camps” as part of its marketing strategy. The purpose was to offer live demonstrations of Palantir’s products to potential clients. By showcasing AIP’s capabilities to prospective customers, the management successfully generated a sizable new business pipeline.
Throughout the year, the company conducted more than 850 boot camps, leading to a surge in new clients as AI applications expanded.
In 2023, Palantir witnessed a 35% year-over-year growth in total customers, reaching 497. More notably, client growth from the private sector soared by 44% to 375. In the last quarter alone, revenue from U.S. non-government clients surged by 70%.
These outcomes silenced the critics and doubters. Palantir demonstrated its genuine expertise in AI, and customers…
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