PLTR Stock: Why Red-Hot Palantir Is on the Move Today

Shares of Palantir Technologies (NYSE:PLTR) are on the move for a second day. PLTR stock was up more than 10% in premarket trading on Monday after gaining 6.24% on Friday.

Palantir Technologies (PLTR) headquarters
Source: Sundry Photography /

The move is likely attributable to news that the “new-tech” firm is teaming with “old-tech” via International Business Machines (NYSE:IBM), in a partnership that will expand Palantir’s sales force. Bloomberg earlier today reported that the collaboration will provide the Denver-based data-analysis software maker with access to a sales team of 2,500 people. The firm only has 30 doing that work currently, according to the report.

Palantir’s artificial intelligence (AI) technology is not easy to implement. Its complexity requires more trained staff to support customers. The company will need to increase its operating expenses to hire staff as it wins more customer contracts. This will weigh on the near-term results, noted InvestorPlace contributor Chris Lau last week.

The Deal Comes Amid Big Blue Shift

News of the partnership is just the latest move by IBM as it looks to shift its focus. In October, Big Blue announced it would spin off its Global Technology Services division into its own publicly traded company. The move will help the firm focus on cloud services.

Investors have been lukewarm to the changes, as IBM stock has gained 6.8% in the last three months while the S&P 500 is up 15.8% in the same period.

To expand IBM’s cloud and AI business, half its revenue will need to come through partnerships like this one, Bloomberg reported. The venerable tech firm sees the Palantir relationship as a way to help non-technical customers to use AI software to maximum effect.

Team-up Follows Big Deals for PLTR

On Jan. 28, Palantir announced a multi-year enterprise agreement for its Foundry Platform with Rio Tinto (NYSE:RIO).

Cyclical miners need data integration projects and digitization to transform the business. The mining and metals market is highly competitive. So, giant companies like Rio will need to operate more efficiently to survive. And as the pandemic continues, the company may optimize its value chains to maximize the safety of its staff and customers.

That announcement followed news on Jan. 19 that Palantir would provide Pacific Gas and Electric Company (NYSE:PCG) with its Foundry software. The utility will give PG&E decision-makers an integrated platform to provide “a real-time, complete operational picture.” The deal is for several years and is in the multi-million-dollar range. It is also the first U.S. utility customer for Palantir.

To be sure, Palantir remains controversial and has been very tough to pin down. The company has maintained a strong base of detractors which only seems to grow stronger in its condemnation of PLTR stock, contributor Alex Sirois wrote last week.

Describing PLTR stock as one that “bucks expectations,” he wrote that the stock remains a buy simply because the company continues to build its book of contracts, moves with skill and has a strong base. Today’s IBM news certainly provides evidence of that.

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

InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.

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