In mid-1944, the Allies of World War II were putting the finishing planning touches on Operation Overlord, or, as it’s more popularly known, “D-Day.”
To pull off the largest amphibious invasion in the history of warfare, and to successfully land more than 13,100 Allied paratroopers, General Dwight D. Eisenhower and his fellow planners needed maps – and plenty of them.
Maps of miles of French beaches and rugged cliffs, maps of rivers and estuaries, maps of country roads and highways, farms and hedgerows.
They needed geospatial intelligence, or GEOINT, sourced from spies, POWs, air and naval patrols, – any source they could lay hands on, even old tourist guidebooks. This intel helped ensure a successful invasion and the eventual liberation of western Europe.
The need for solid, accurate geospatial intelligence hasn’t diminished in the nearly eight decades since then. If anything, it’s become even more important. Former National Geospatial Intelligence Agency chief Robert Cardillo acknowledged as much during the D-Day anniversary ceremonies not long ago.
And its not just for the military, either. Companies up and down the private sector have come to increasingly rely on good GEOINT; it’s indispensable to civil engineers and construction, insurance companies, logistics, and many others.
Fortunately, they don’t have to shake down spies or dig up old Fodor’sguides to get the goods.
They have only to turn to one Denver-based “Big Data” firm who just clinched a critical strategic partnership with one of the world’s most dynamic GEOINT providers…
This Firm Has “Eyes On” Everywhere
I’m talking about Palantir Technologies Inc. (PLTR). Fundamentally, Palantir is a Big Data analytics company; it processes vast amounts of data to help its growing client list make better, more informed decisions.
That mission only sounds simple, though.
In a world with increasingly chaotic weather, in which sea level rise could hit three feet by 2100, decisions on where to build or invest, where to reinforce and upgrade infrastructure, and where to get out of Dodge are taking on a new urgency. Are you a CEO or state governor planning to build a new corporate campus or freeway extension? Or a real estate developer planning on breaking new ground? Palantir can tell you whether or not you can expect to be burned or flooded out in one, five, 10, or 20 years, or whether the climate will be livable.
And of course, at a time of increasing global tension and confrontation, knowing when and where enemy troops may come pouring over borders is essential.
Palantir realizes this, so last year it sank a portion of its $400 million SPAC investment funds into Herndon, Virginia-based BlackSky Technology (BKSY). BlackSky itself went public in 2021 via the popular SPAC route.
So, in a way, this is a story about two stocks to watch. That said, while BlackSky is the quintessential tech small-cap, its $2 shares have been extremely volatile for the past year, and I think this company, while worth watching, needs to turn in more performance before we can move.
Palantir stock is a different story, however. After a blockbuster debut and rather frothy 2021, the stock has come down to sustainable, reasonable levels. And if the company keeps making savvy partnerships and adding to its client roster with more offerings, the future is bright.
For instance, its investment allows Palantir to tap BlackSky’s unique monitoring technology and offer analysis to its own clients. And when I say “monitoring,” I mean BlackSky has the capability to look in on sea level rise, mass movements of people and vehicles, and construction activity. This gives its customers – government and private-sector alike – “first-to-know” advantage on events unfolding worldwide.
For instance, back in January, BlackSky was among the first to uncover the ominous Russian military buildup on Ukraine’s Russian and Belarussian borders. As Putin’s armies began to roll into Ukrainian territory, BlackSky was able to make public images of troop movements, pitched battles and skirmishes, battle damage, and even the muzzle flashes of firing artillery and armor. It’s thought that BlackSky’s “eyes in the sky” can resolve objects as small as three feet – about as long as a new Russian AK-12 rifle. By 2023, BlackSky aims to offer resolution in the 11-inch to 19-inch range.
And now, because of its savvy, forward-thinking strategic partnership, Palantir can leverage all this capability.
Of course, even before the BlackSky partnership, companies and governments relied heavily on Palantir’s data. The famously secretive company plays its cards close to the vest, but its customer roster includes governments in the United States, United Kingdom, the European Union, and beyond. It includes private companies like Merck & Co. Inc. (MRK), Airbus SE (EADSY), Morgan Stanley (MS), Fiat Chrysler Automobiles, and others. 57% of their current clients are in the United States and 43% are abroad.
The company has deployed its talents in combating money laundering, thwarting the spread of ISIS in Europe, and huge, diverse array of other projects for its clients. The U.S. Federal Aviation Administration (FAA), for instance, has hired Palantir to crunch data and uncover hidden safety issues and efficiency chokepoints.
It’s even thought that Palantir played a key role in helping uncover the Pakistani lair of Osama bin Laden, enabling U.S. Navy SEALs to find and kill the terrorist mastermind.
Palantir keeps its exploits hush-hush, but there’s no hiding its stock market prospects…
This Company Looks Solid from Here Out
As I said, when Palantir debuted on the markets, investors couldn’t get enough, bidding the stock up beyond the $35 level in a speculative mania for, well, nearly any stock. The shares have since come down to Earth to much more reasonable levels.
That said, I expect it could climb steadily and sustainably for the next five years at least.
Its customer base grew 71% in 2021 – a very healthy demand picture. Palantir closed out Q4 with some impressive numbers. Total revenue grew 34% to $433 million, with a 47% increase from commercial and 26% increase from government clients.
In 2021, Palantir saw revenue up 41% from the prior year and added 147 new customers. Going into 2022, they expect to continue to add to this growth. Chief Executive Officer Alex Karp expects annual growth of 30% or more through 2025.
Cheers and good investing,
— Michael A. Robinson
Source: Strategic Tech Investor