Big data analytics pioneer Palantir Technologies (NYSE:PLTR) is expanding its reach into a different area while simultaneously cashing in on the current SPAC boom. Geospatial intelligence platform BlackSky (NYSE:BKSY) made its public debut today by merging with a SPAC, and Palantir has committed to an equity investment as part of the merger.
What It Means for PLTR Stock
A decision such as this by Palantir is a clear move to diversify its balance sheet. The company has recently doubled down on efforts to expand through investments and partnerships with an emerging generation of technology companies that offer innovative platforms.
While Palantir may not have an established venture arm as some larger tech companies do, it is clearly committed to establishing one, likely with the aim of deploying its software products. In addition to the equity investment in BlackSky, the company recently entered into an agreement with Skydweller Aero. As a result, the aerospace startup will use its Foundry analytics platform at-scale and onboard information processing.
None of these agreements have hurt PLTR stock – quite the opposite in fact. This morning saw shares start to climb almost instantly following the previous day’s decline. As of this writing, PLTR stock is up 1.53% on the day. Earlier this week, the stock stayed well in the green, only declining yesterday.
Why It Matters
It is clear that Palantir has its eye on the future, and quite literally, on the skies. The company has a history of winning government contracts, due largely to its Gotham software, noted for its decision making utilities. It certainly makes sense that a company looking to establish itself in new software markets would set its sights on that of aerospace technology.
Palantir, though, also has a history of working with BlackSky. The two combined forces earlier this year as joint partners in an initiative in which BlackSky delivered information and insights to Palantir customers.
According to Palantir COO Shyam Sankar, “BlackSky is a strong partner to Palantir and reinforces our shared goals around compressing decision-chains for operational users at the edge.”
For Palantir to want to make a direct investment in a company that has already served it well certainly makes sense. As with Skydweller Aero, this type of partnership presents an opportunity to deploy software while establishing itself in a new industry, making it more likely that similar companies will turn to them in the future.
What’s Next for PLTR Stock?
These expansion initiatives have yielded Palantir constant media coverage recently and PLTR stock has reacted well. The month of August saw shares climb by more than 19%.
While BlackSky’s first day trading did not go as well as investors might have hoped, there is plenty of reason to expect that things will turn around, more than is often the case for newly public SPACs. Not all SPACs make their market debuts with an equity investment from an established industry leader such as Palantir.
This type of partnership can help the company accelerate BlackSky’s go-to-market strategy while allowing Palantir to continue its expansion efforts that have already helped drive up the prices of PLTR stock. As of now, skies look more blue than black for both companies, and investors should be overall optimistic.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
