Palantir Finally Had Some Downside Pressure
+ a new deal and updates to Palantir's privacy technology
Welcome back to DailyPalantir! Today we discuss the volatility to the downside we saw on Palantir along with some new deals. Let’s get into it!
Down 3% Yesterday
So, it’s crazy to eve complain about this, but we finally did see some downside pressure on Palantir stock after 3 weeks of continuous upside, at one point cracking $33.
This kind of volatility can be nerve-wracking, but it’s not out of the ordinary for Palantir. Investors just haven’t seen it for a while which is what has made the past couple of weeks fun as Palantir surged 94% YTD. The decline seems to be driven by broader market jitters, particularly around Nvidia’s upcoming earnings. Since Nvidia is a big player in AI, and Palantir gets lumped in with other AI stocks, anything that happens with Nvidia has a ripple effect across the sector.
Even with this recent pullback, Palantir’s stock is still up an impressive 86% for the year. That kind of surge naturally leads some investors to lock in profits, which adds to the volatility. But this isn’t a sign that something’s wrong with the company. It’s just part of the ebb and flow of the market. The fact that Palantir is now one of the more expensive software stocks, in terms of valuation, does make some people wonder if it’s getting ahead of itself, but that’s not unusual for a company with big growth expectations. While Palantir might be expensive, the street is betting that will grow into its valuation. This means that holding $30 would be very strong for Palantir, but any dips below that isn’t the street saying they don’t like Palantir — it’s likely a macro environment simply pointing to the inability to maintain that premium valuation due to whatever reason. That to me is an opportunity, not something to be afraid of. If Palantir crushes Q3 earnings with a 30% growth quarter along with the macro being in a strong place, I think we will keep and potentially expand the premium valuation we have.
I think Palantir is likely to trade in a range between $25 and $35 for now, depending on how the market reacts to broader economic factors and Palantir’s performance. If earnings impress and the market stays stable, we could see the stock move up towards the higher end of that range. On the flip side, if the economy takes a hit or the company underdelivers, a dip towards $25 wouldn’t be shocking. For anyone who bought at higher prices, this volatility might sting a bit, but for those with a longer view, it’s just part of the ride.
New Sompo Deal
Palantir recently announced a new three-year deal with Sompo Holdings, one of its early investors, aimed at transforming Sompo’s insurance business in Brazil through data integration and AI technology. This partnership builds on their existing collaboration with Sompo's parent company in Japan, but now extends the reach of Palantir's platforms, Foundry and AIP, into Brazil’s insurance market. The deal represents Palantir's ongoing expansion into international markets and underscores its growing influence in commercial sectors, particularly outside the U.S.
The focus of the deal is on enhancing Sompo's pricing, underwriting, and risk management processes, particularly in their marine insurance segment, where they have been a market leader in Brazil since 2017. By utilizing Palantir's AI-powered tools, Sompo aims to increase operational efficiency, speed up decision-making, and improve service to their customers. The technology will help Sompo interpret large volumes of data, including physical documents, to propose more accurate pricing and assess risk factors more effectively. This is a prime example of how Palantir’s platforms are being used to tackle industry-specific challenges.
What makes this partnership significant is not just the implementation of cutting-edge AI technology but also the cultural shift it represents within Sompo. The company’s Chief Strategy Officer highlighted that the challenge isn’t just automating processes, but ensuring that their team is prepared to effectively engage with this new technology. It’s a recognition that successful digital transformation isn’t just about deploying AI tools, but also about getting the people in the organization ready to work with them in a meaningful way.
Palantir’s involvement in this project reflects its growing footprint in Brazil and Latin America. While Palantir has already established relationships with other major players in the region, like Rio Tinto, this deal further cements its role in supporting critical industries with advanced AI solutions. The Vice President of Palantir Latin America pointed out that the company’s AI operating system is already powering many of Brazil's key organizations across various sectors, from government to retail and tourism. This deal with Sompo reinforces Palantir’s commitment to expanding its presence in Latin America’s commercial markets.
In essence, the Sompo deal is another step forward for Palantir’s international growth strategy. By leveraging their AI and data platforms in new markets, Palantir continues to build on its reputation as a leader in digital transformation. For investors, this partnership signals Palantir's ability to not only maintain but also grow its relationships with existing clients, adding long-term value through expanded use cases. As Palantir secures more deals like this, the company strengthens its position as a key player in the global AI and data analytics space.
Palantir’s Focus on Privacy
If you’ve ever heard someone say that Palantir is an evil company that’s trying to steal everyone’s data, send them this new article by Palantir.
Palantir recently released a detailed article emphasizing its commitment to privacy and civil liberties, pushing back against the idea that it’s an invasive data company. The company highlighted how it has long been proactive in designing privacy-first features within its software, anticipating legal and regulatory changes even before they were formally introduced. For example, before the EU implemented the General Data Protection Regulation (GDPR), Palantir was already building capabilities like data minimization and anonymization into its platforms, showcasing its forward-thinking approach to data privacy.
A major focus for Palantir is not just meeting current legal requirements but staying ahead of the curve by developing technology that will comply with future regulations. This includes advanced privacy protections integrated into AI applications, such as large language models, which present new challenges and risks in data privacy. Palantir has made privacy controls foundational to its products, allowing organizations to deploy strict privacy standards while also benefiting from robust data analysis and integration.
One of Palantir’s key selling points is its ability to offer advanced privacy-enhancing technologies across industries. The company ensures that sensitive data is properly managed through features like encryption, data retention policies, and detailed audit logs that keep track of access and interactions. These capabilities allow Palantir’s customers to balance the benefits of AI and data analytics with strong privacy protections, which is increasingly important as AI continues to proliferate across sectors.
Palantir’s emphasis on privacy is further reinforced by its extensive patent portfolio, which includes numerous patents related to privacy technology. These patents underline the company’s commitment to building systems that protect individual rights while enabling powerful data processing. This is a core element of Palantir’s value proposition, particularly when working with sensitive government and corporate data, as it allows the company to operate in highly regulated environments, such as defense and healthcare, with confidence.
There is a reason Microsoft chose to work with Palantir — both have security clearance at IL-6, which is the highest security clearance you can get with the DoD, implying that the government feels Palantir understands how to protect and keep data classified and confidential.
These are the three parts of the article that I thought specifically explain how Palantir protects privacy and embeds it into the foundations of their technology:
Palantir’s approach to privacy is deeply embedded in its technology and philosophy. The company is positioning itself not only as a leader in data analytics but also as a trusted partner in safeguarding data privacy. This focus on privacy-first products helps differentiate Palantir from other tech companies and addresses concerns that it could be an overreaching "spy" company. It’s a critical narrative for Palantir as it continues to expand globally and deepen its relationships with both commercial and government clients.
Again, people saying Palantir is an evil company simply have no understanding of what the technology does, what principles are rooted in their technology, and how they philosophically believe in deploying the software. When you realize that Palantir has been ahead of most regulatory frameworks and built their technology BEFORE those frameworks became the law, which also means they were ahead of big tech companies that had to adapt, it really puts into perspective how much Palantir cares about privacy and civil liberties.
That’s it for today - see you tomorrow!
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