Artificial intelligence (AI) software stock Palantir Technologies (NYSE: PLTR) is on fire. Shares have risen over 80% during the past year, including a 20% gain over the past month. Wall Street is excited about the company’s future. Its custom software proves valuable in real-world situations, and its robust business performance backs that up.
No matter how good the story sounds, however, it’s only fair to question the stock’s investment prospects after such a staggering run-up. Investors should always look for quality companies, but price matters too. So, is Palantir stock still a buy now?
The technology is hazy, but the results are clear
Palantir specializes in building custom data analytics software on its three development platforms: Gotham, Foundry, and its Artificial Intelligence Platform (AIP). The company cut its teeth working with the U.S. government, and it still gets more than half its revenue from government contracts, especially from the U.S. Department of Defense. Since the company went public, it has pushed more energetically into the corporate sector, and it’s finding success there. In Q1, its U.S. commercial customer count rose 69% year over year to 262.
Custom software is a complex product, and the nature of the applications Palantir sells is often confidential or private. Some might call Palantir a black box because it’s difficult to see its inner workings. However, it delivers real-world outcomes for its customers that make its products’ value crystal clear.
One such example is the company’s recent contract expansion with Tampa General Hospital. In 2021, it implemented AIP software to develop a new platform to manage bed placement, patient itineraries, and staffing, and the resulting improvements in efficiency dramatically reduced patient wait times and stay durations. More efficient hospitals deliver better care and make more money. Tampa General began its relationship with Palantir using its software for a single use case — it has since expanded that to over a dozen.
That’s just one example, but it underlines how much value Palantir brings to…
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