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Palantir Stock: Future Looks Safe for Cybersecurity Play
Stock Analysis & Ideas

Palantir Stock: Future Looks Safe for Cybersecurity Play

Palantir Technologies (PLTR) provides cybersecurity, and related software and services to governments, as well as private businesses. I am bullish on the stock.

The Colonial Pipeline ransomware attack happened in May, and has been one of the bigger news stories of 2021.

While that event wasn’t good overall, it at least helped put the issue of cybersecurity in people’s minds. (See Insiders’ Hot Stocks on TipRanks)

Of course, when the nation prioritizes security, that’s bullish for Palantir and the company’s stakeholders.

As we’ll see, the company has received not only attention from high-profile organizations to help combat security breaches, but also potentially lucrative contracts.

A Quick Look at PLTR Stock

The $40 mark should prove to be a significant level for the remainder of this year, and even 2022 as well.

It’s certainly not impossible for PLTR stock to reach that level. After all, the stock price got there in January, and then again in February.

Then the buyers were rejected and the sellers took over. Since late February, PLTR stock has been trading in the 20s, with very few exceptions.

That’s frustrating to long-term shareholders, no doubt. Yet, it’s just the market’s way of testing the investors’ patience and belief in Palantir as a company.

If the buyers could get PLTR to $40 before, they should be able to do it again. Given the company’s positive news catalysts, it’s not a question of “if,” but rather, “when.”

Making the Military More Secure

One way to demonstrate Palantir’s strong foothold in the security services industry is by observing how organizations trust the company, and are even willing to sign lucrative contracts with Palantir.

On recent example involves the U.S. military.

Reportedly, the U.S. Army’s Program Manager for Intelligence Systems and Analytics chose Palantir to deliver the Army’s Intelligence data fabric and analytics foundation for the Capability Drop 2 (CD-2) program.

This could be worth hundreds of millions of dollars, as Palantir has progressed to the next phase of the Army’s $823-million indefinite delivery, indefinite quantity (IDIQ) contract.

It’s evident that the U.S. military trusts Palantir. The company is also helping to modernize the Army’s intelligence enterprise through the Capability Drop 1 (CD-1) and Tactical Intelligence Targeting Access Node (TITAN) programs.

Centralizing Data for Critical Research

Another high-profile client that trusts Palantir is the National Institutes of Health’s (NIH) National Center for Advancing Translational Sciences (NCATS).

That organization is involved in the battle against the COVID-19 pandemic, and so is Palantir.

Reportedly, the NCATS awarded Palantir a contract to continue providing a secure cloud-based data enclave to centralize data on COVID-19 for collaborative clinical research.

More specifically, Palantir is tasked with supporting the National COVID Cohort Collaborative (N3C) and its data enclave.

Again, we should emphasize how profitable the contract will be. It’s an indefinite delivery indefinite quantity (IDIQ) contract with a total potential value of $59.5 million over two years.

Moreover, the contract involves an initial task order for $7.9 million over the first five months.

It makes perfect sense for the NCATS and N3C to avail themselves of Palantir’s software. This software offers a secure platform to integrate, manage, harmonize, and analyze COVID-19 data. Furthermore, the software provides controlled access to internal and external collaborators.

Wall Street’s Take

According to TipRanks’ analyst rating consensus, PLTR is a Moderate Sell, based on one Buy, two Hold, and three Sell ratings. The average Palantir price target is $24.20, implying 7% downside potential.

The Takeaway

As more organizations trust Palantir, the bullish thesis for PLTR stock only becomes stronger.

At the same time, the stock has gone nowhere for many months.

Patience will be the key to success with PLTR stock. Given the company’s potentially lucrative contracts, it’s likely that Palantir’s investors will have their day in the sun again, very soon.

Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.

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