Palantir (NYSE: PLTR) stock has seen a near-complete reversal of any gains since the company’s public listing back in September 2020. After surging up to all-time highs of $35.20 in January 2021, it’s been a rocky road for the high-end data analytics giant – with PLTR currently trading around the $10.60 mark and outlining a more than 60% loss just over the last year.
Insider selling, internal shifts, and worse than expected short-term earnings have stunted Palantir’s ability to grow shareholder value, and with most Palantir backers looking years ahead, it's worth wondering how PLTR will hold up in the meantime as the stock continues its downfall.
Today, Palantir entered a new government contract worth $5.3M with the CDC for the management of Covid-19 drug distribution in the US. The news comes as an extension of a pre-existing contract set up in 2020. Interestingly for investors, one of the red flags that were picked put from Palantir’s most recent earnings report was the company’s stagnant government clients – compared to growth in the heavily-focused commercial sector.
Investors used to criticize Palantir for its sole reliance on government contracts; now the company is branching out, investors aren’t happy with the lackluster effects of increased commercial focus on the company’s government branch.
Despite the news that Palantir is still growing its government sector; PLTR stock sold off by a further 4% in Tuesday premarket trading – extending a heavy downside that doesn’t appear to be easing. If Palantir is really the future of data-driven enterprise, it isn’t surprising the company is amping up spending, thus resulting in harder-hit margins. If Palantir can lock down both government and commercial revenue growth in the coming quarters, investors might not have much to scrutinize.
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Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.