My Top Recent Tech IPO to Buy in April

This company has been described as “Silicon Valley’s most secretive start-up.” In its early days, the company developed software to help U.S. intelligence agents with counterterrorism investigations…

But Palantir (NYSE:PLTR) has since diversified its business, and it now works with other government agencies and commercial clients, both in the United States and internationally.

Palantir went public in Sept. 2020, and since then, the stock has surged over 140% from its first day closing price. But the company still has plenty of room to grow its business, and Palantir looks like a good long-term investment.

Total addressable market

Many modern institutions, whether they are government agencies or commercial enterprises, generate an incredible amount of data. For instance, consider a manufacturing plant: There will be financial data from enterprise resource planning (ERP) systems, employee data from human resources (HR) systems, customer data from customer relationship management (CRM) systems, logistics data from distribution centers, inventory data from suppliers, sensor data from plant operations — the list goes on and on.

All that data is great — organizations that effectively use data can gain a real advantage over their peers. But working with data on that scale is incredibly challenging.

Palantir solves this problem with its two software platforms: Gotham and Foundry. The former was built for government agencies in the defense and intelligence sectors, while the latter was built primarily to assist commercial customers. But both have a similar objective: They make it possible to integrate, analyze, and make sense of vast datasets. This allows clients to make faster, more informed decisions about their operations.

Currently, management estimates Palantir’s total addressable market at $119 billion, which breaks down into $63 billion in the government sector and $56 billion in the commercial sector. That puts the company in front of a massive opportunity.

New partnerships

In April 2020, Palantir signed a $10 million deal with Space Force, the space service branch of the U.S. Armed Forces. Space Force will use Palantir’s Foundry software to integrate sensor data and track objects in space.

In Oct. 2020 Palantir won a $91 million contract with the U.S. Army Research Lab, which will use Gotham and Foundry to integrate data and train AI models, expanding its artificial intelligence capabilities.

In the commercial sector, Palantir recently announced a new partnership with IBM. The effort will integrate Palantir’s Foundry software with IBM’s cloud data platform, making it easier for enterprises to build AI-powered applications.

These deals — and the dozens of others signed last year — could be substantial growth drivers for Palantir. For instance, IBM’s 2,500-person sales force is larger than Palantir’s entire business, so the partnership significantly expands the company’s distribution capabilities. That could help it win new…

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