artificial intelligence investing algorithms
Three years ago, data analytics company Palantir (NYSE: PLTR) debuted on public markets through a direct listing. Since then, its shares have risen around 80%, with most of that growth coming from a recovery in 2023 as investors became more optimistic in its ability to incorporate new generative artificial intelligence (AI) tech into its business model. Let’s explore what the next 10 years could have in store for the company.
Palantir’s unique take on machine learning
Palantir is an American software company known for data fusion and mining, a process that involves analyzing a large volume of information and combining data from different sources into useful insights. The company is unique because of its significant exposure to sensitive government clients and missions.
According to CNBC, Palantir’s software helped the U.S. find Osama Bin Laden in 2011. And it is currently used to help the Ukrainian armed forces with targeting in the war with Russia.
So far, Palantir’s business is performing reasonably well. Third-quarter earnings grew 17% year over year to $558 million, with the fastest growth coming from its commercial clients, which increased 23% to $251 million — a bit under half of the total. Public sector deals represented the rest.
While Palantir’s government contracts give its business stability and a solid niche (not every company is trusted to deal with such classified and sensitive information), commercial clients could represent a significant potential growth opportunity in the future. Management is rapidly incorporating generative AI into its business model to make its software solutions more useful to potential enterprise clients.
AI will become a bigger part of the business
Generative AI is a unique subfield of artificial intelligence where algorithms are designed to create new content based on vast arrays of training data. While this is distinct from Palantir’s legacy data management businesses, the two technologies synergize well. For example, generative AI could help automate Palantir’s analytics…
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