Palantir Price Target Upside After Blockbuster NATO, DOGE Partnerships
The AI firm has a lot of positive momentum following a latest price target bump.
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Regular readers know that we increased our target price on Palantir Technologies PLTR last Thursday, from $110 to $116, based on an improved technical picture.
The stock is up almost 7% early on Monday morning. We talked about the technicals. We talked about Q1 earnings expectations. We should get those numbers on or around May 6. That's not why the stock is flying on Monday morning. There's some news, and it's news that we were hoping for/waiting on for some time.
The Palantir Stock News
On Monday morning, NATO released a statement that revealed that on March 25, the NATO Communications and Information Agency (NCIA) and Palantir Technologies finalized the acquisition of the Palantir Maven Smart System (MSS) for employment within NATO's Allied Command Operations. This, according to the military alliance, marks a significant advancement in the modernization of NATO's warfighting capabilities.
NCIA General Manager Ludwig Decamps commented in the press release:
"NCIA is pleased to team up with Supreme Headquarters Allied Powers Europe (SHAPE) and Palantir to deliver MSS NATO to the Warfighter, providing customized state-of-the-art AI capabilities to the Alliance, and empowering our forces with the tools required on the modern battlefield to operate effectively and decisively,"
Allied Command Operations are expected to be able to deploy the new technology within 30 days. NATO is touting the fact that the procurement process for this system took just six months from defining the requirement to full adoption.
General Markus Laubenthal, chief of staff at the Supreme Headquarters of the NATO alliance, said:
"Innovation is core to our Warfighting ability. Maven Smart System NATO enables the Alliance to leverage complex data, accelerate decision-making, and by doing so, adds a true operational value."
Palantir Working With DOGE
It has recently come to light that Palantir Technologies is reportedly (first reported by Wired) working with the Department of Government Efficiency, also known by the acronym "DOGE" on a significant IRS-related project.
Palantir is building a new "mega API" purposed for accessing IRS records. Representatives from the company and IRS engineers have been working together to build a single API layer above all IRS databases. DOGE is looking for Palantir's Foundry software to ultimately become the "read center of all IRS systems."
Re-Shoring Can Boost Palantir
In addition to this hard news, I want readers to think about U.S. manufacturers that, in all likelihood, will be re-shoring at least a portion of their operations. Even Apple AAPL, a firm that makes just about everything it sells in Asia and the majority of these products in China, has committed to $500 billion in U.S. investment over the next four years.
Should there actually be an increase in the building, rebuilding and modernizing of factories and plants in the U.S., in order to become competitive and somewhat margin-friendly, these businesses are going to have to develop new ways of building things here in the U.S. There will be jobs, probably good jobs, but not hard-hat, lunch-pail, eight-hours-a-day type jobs.
These facilities are going to have to utilize cutting-edge technology and those working at these facilities will have to be able to work with and complement a 2025 "assembly line." Palantir, in my opinion, and this is just an opinion, will be a beneficiary of any industrial or technological re-shoring effort as robotics, artificial intelligence and the optimization of big data will likely be more in focus than ever before.
This should boost, one would think, Palantir's commercial business. Don't forget Palantir's fortress-like balance sheet that should allow for any corporate flexibility required as the firm could be pulled in multiple directions. Those looking for competitors to use as a hedge in some way, should there be more business available than Palantir can handle alone, I could see Snowflake SNOW stepping up to that plate.
My Thoughts on Palantir Stock
Well, I have not changed my mind at all since Thursday. I still have a large, long equity position in Palantir.
My target price is still $116. I'm not going to do more than reiterate that at this point. That said, I think it's safe to say that I have an upside bias in the consideration of where this target goes next.
At the time of publication, Guilfoyle was long PLTR equity.
