Palantir drops 4%

+ New NHS Updates

Welcome back to DailyPalantir! Today Palantir fell 3.4% — primarily driven by a macro sell off. Let’s get into it.

Red day for Palantir

Palantir fell today 3.4% primarily off a macro sell off to start the first day of trading in 2024.

The entire market was down with the exception of some individual crypto stocks as Bitcoin hit 45K and financials — particularly regional banks, JPM, Bank of America, etc. that did well.

Tech sold off — and it makes sense. Palantir had an amazing run in 2023 along with the broader Nasdaq 100 (QQQ) up 50%+ for the year.

It feels rather healthy that the market is taking a little breather. The question becomes if this is a dip that gets bought or if it’s a dip that continues to head lower as the broader market corrects…time will tell. We are getting a LOT of macro data this week that I’ll keep you all updated on the newsletter.

In general, nothing happened today that would warrant a significant sell of Palantir independent of macro events, so it was par in line for general market activity today.

People in the UK Have not Opted Out…

News broke this morning from the NHS on December data of patients that decided to opt out of sharing their data for research with Palantir’s new Federated Data Platform that just won $480M from the UK’s NHS. Citizens are not able to opt out of the system completely, but they were able to opt out of the research part of sharing their data.

The research portion is significant because it allows Palantir to do R&D on determining how the platform is working and where they can expand to make it better, but a measly 20K people opted-out.

If you look at the chart during June 2021, there were about 3M people that opted out when the NHS instituted harsher GDPDR regulations around data privacy and that scared off many more citizens in the UK. When it came to the NHS asking for their data, it seemed like…just maybe….people actually want to contribute their data to a company showing them the promise of fixing long wait times and backlogs.

Either people genuinely did not care to opt out of this, or they were smart enough to realize that this is something that will only help them in the long term. Although the British media has made Palantir to be the evil company everyone hates, the numbers of opt-outs make it very obvious that people don’t care as much as the media makes you think or just want better healthcare so are willing to give up their data.

Huge W for Palantir.

Remember, executing on the results Palantir is promising for the NHS deal would represent a clear demonstration of the company's competencies and capabilities in managing and analyzing large-scale, complex health data sets. This could improve Palantir's standing in the healthcare industry, opening doors to future collaborations and contracts with other healthcare organizations.

It would also exhibit Palantir's adaptability and flexibility in a new environment, different from its usual clientele of defense and security organizations. It would showcase how Palantir's technology can be tailored to different sectors beyond defense, thus showcasing its diverse application. This can lead to fixing other healthcare systems across Europe and North America like Sweden or Canada.

• Successful execution of the NHS deal improves Palantir's reputation in the healthcare industry.

• It showcases Palantir's capabilities in handling large-scale, complex health data.

• It opens doors to future collaborations and contracts with other healthcare organizations.

If they do this, they also build trust with one of the world's largest health providers. The British public can begin thinking favorably of Palantir. This deal has massive implications over the next 5 years, and now that Palantir seemingly has the green light with low opt-outs to execute, it’s time to see the results they can provide.

New FedStart Partners

Palantir launched FedStart in June — since then they launched with 9 partners, now at 11 after adding 2 more.

FedStart is essential to Palantir’s scaling strategy because it facilitates uninterrupted access for tech startups into the U.S. federal government software market, providing them with a fast, efficient path to achieving high-level security clearances. By doing this, Palantir can tap into the rapid growth of the defense tech startup sector, estimated to be $34 billion as of 2023.

One of the critical elements required for tech companies to secure government contracts is acquiring the proper certification, such as the Impact Level 6 (IL-6). This certification can be both costly and time-consuming, creating a barrier for startups that often operate on limited resources. With FedStart, Palantir bridges this gap by offering its software, which has already acquired high-level accreditations such as IL-6.

• FedStart provides a streamlined, fast-track approach for startups to penetrating the government market.

• Palantir’s own high-level accreditation with IL-6 allows these startups bypass the complex and expensive process of securing their certifications.

• Palantir's FedStart program has the potential to significantly increase the speed of government market penetration for startups.

• By providing its existing certifications, Palantir stands to boost consulting and licensing revenues.

• Startups using Palantir's platform can represent new revenue streams as they expand into the defense tech sector.

In addition to reducing turnovers and licensing its software to defense tech startups, Palantir’s FedStart initiative is expected to put a positive dent in its overall revenue stream. Specifically, Palantir stands to gain from consulting and licensing fees, providing a steady income flow while also expanding its influence in the government sector.

Now, the 2 companies that were added were:

LILT (AI powered translations) & Rizkly (cybersecurity)

Rizkly:

LILT:

The FedStart model ALSO has the potential to expand beyond the defense tech sector into other areas of the government where similar obstacles exist to enter the market. By doing so, it further increases Palantir's earning potential through an extended network of startups in diverse government sectors.

FedStart could significantly contribute to the company's revenue by providing a new, steady income stream, both from the direct consulting and licensing fees it facilitates and the indirect boost in startups' dependence on their software. As startups scale and bring in government contracts, they may remain embedded in Palantir's ecosystem and continuously contribute to its revenue growth. More partners = more potential for revenue. This is something to seriously watch going into 2024. Palantir did not have this revenue 6 months ago, and if it can scale, it is an additional stream outside of AIP, Foundry, Gotham, and Apollo.

That’s it for today - I’ll see you tomorrow in your inbox!