As technologies go, AI is a game-changer. Maybe the game-changer of game-changers. As Time detailed in its February story “The First AI War,” there’s one public company – an American company – that’s staked itself to an early lead. That company is Palantir Technologies Inc. (PLTR), observes Bill Patalon, chief stock picker at Stock Picker’s Corner.
Before I came into the investing-research business in 2005, I spent 22 years as an award-winning business journalist. A swath of it was spent covering the same defense sector that employed my dad, a great man who had a five-decade professional career as an engineer. It all taught me the importance of history – especially military history – because I learned that you can’t understand what’s coming…if you don’t understand what’s been.
Like the “first” Cold War – and the New Cold War. Like the generations of globalization now shifted into reverse as “deglobalization.” And how new defense technologies can provide that critical “edge” on the shooting battlefield…and on that “other” battlefield we know as the global economy.
Palantir was seeded in part by an investment from the CIA’s venture-capital arm. It built its business providing data-analytics software to government agencies dealing with immigration, law enforcement, the military, and more.
In laymen’s terms (and I’m intentionally oversimplifying this), Palantir’s “superpower” on the defense side of its business is how its AI tech can take streams of data from an array of sources – I’m talking troops on the ground, armored vehicles, aircraft, satellites, and drones – and weave that into a rolling, real-time view of the battlefield that commanders can use for instantaneous decision-making.
On the battlefields of old – on land, sea, or in air – the game mostly came down to numbers superiority. With AI, that game becomes one of “decision superiority.”
Nations know this, which is why AI is fueling the New Arms Race. Here in the United States alone, AI-defense spending is spooling up – fast. Pentagon AI contract awards zoomed from $355 million for the 12 months that ended in August 2022 to $4.6 billion a year later, a Brookings Institution study found.
The military/government business is what drew me in, but it’s only half of the story. The company’s commercial segment – the other 45% – is a bonus: It’s surging with success stories.
Tyson Foods Inc. (TSN) used Palantir’s know-how to improve its trucking operations. United Airlines Holdings Inc. (UAL) linked up in a “strategic partnership” to better manage its data. Palantir has also found commercial fans at other companies.
The best way to go here is the “Accumulate Strategy.” Establish a foundational position in Palantir. Add to your stake on pullbacks. And look to hold this stock for three to five years.
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