Palantir’s Strategy Is Savvy in the Face of Political Headwinds

Palantir (NYSE:PLTR) is not going to falter now that a new presidential administration is coming into office. Sure, Palantir is a right-wing oriented company entrenched in government work with an outspoken Trump supporter in founder Peter Thiel. And Palantir stock will continue to be associated with business choices and affiliations in its past. But the company looks to be well aware of its current operating environment. 

Palantir Technologies (PLTR) headquarters
Source: Sundry Photography /

It is playing the game well, and has been financially strong of late. I see it as a company that can navigate its landscape well and continue to rise. The company is pivoting toward becoming a less-controversial government contractor with analytics and software capabilities it will continue to leverage into a deep government network. 

Palantir Stock and the Pivot

Palantir looks to be leaning into a strategy of leveraging its abilities and platforms toward a less military aligned strategy. Yet, the company is clearly leaning more heavily toward a portfolio of clientele which is increasingly government. Government contracts make up more than half of its revenue, and government related work increased 76% from 2019 to 2020.

Detractors of Palantir will continue to point to its involvement with defense and policing. Detractors specifically abhor the company based on the utility of its platform by Immigrations and Customs Enforcement as it relates to migrant families. I’ll admit there is a quite unsavory aspect to the business, however, it is a complex situation with many actors. Nonetheless, the company has been branded.

To me it seems the company is pivoting toward government work which is much less controversial. A glance at the company’s most recent press releases indicates this may be the case. The company is working to strengthen a partnership with the Greek government to fight the novel coronavirus. 

And then on Dec. 8, the company announced it had inked a $44.4 million deal to provide data analytics for the Food and Drug Administration. My suspicion is that Palantir is much more likely to seek and sign more of these non-controversial contracts in light of the incoming Biden administration.

Politics and Profits

Palantir was founded by outspoken Trump supporter and Silicon Valley scion Peter Thiel. Palantir is therefore associated with his views. Further, Palantir’s operations and contracts speak to a company decidedly on the right of the political spectrum. 

But the simple fact is that Trump is leaving office, and conservative politics will have a diminished voice soon. Palantir management knows this. Palantir also knows it must play the game of politics to pump up profits. 

As my colleague Larry Ramer noted, Biden’s team is unlikely to view Palantir as favorably as Trump’s government did. While I very much agree with his point, it also seems to me that Palantir is proactively addressing its image in the contracts it has recently won. 

Simply stated, Palantir can provide software and analytics solutions across a broad spectrum of industry. It has clearly done so already, and has a deep government network into which it can contract its services. I don’t see a seismic downward shift in revenues due to Biden, if at all.

Rising Revenue

Palantir recorded a strong Q3. Revenue rose 52% in Q3 2020 compared to those in Q3 2019. Further, the company raised full-year revenue guidance to project an increase in revenue of 44% year-over-year in 2020. 

The company also recorded an EPS beat of 5 cents on an anticipated 2 cent EPS projection. This speaks to a strong company, and not one in trouble despite Wall Street’s indecisive consensus.


The company is pivoting and based on recent news the markets will reward that pivot. Palantir stock jumped more than 20% on the news of its $44.4 million, three year contract with the FDA. Some have posited that a jump of that magnitude makes no sense. After all. Palantir is projecting more than $1 billion in 2020 revenue, so why should a relatively measly $44.4 million of a billion move market capitalization up by 20%?

The answer is simple: Palantir is playing the game and winning contracts that are congruous with the political zeitgeist. Palantir’s strategy remains the same; Play the political winds to its favor, and leverage its network. It should continue to rise as a consequence.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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