Palantir (NYSE:PLTR) announced on May 4 that it received a $90-million contract from the Department of Health and Human Services (HHS). The federal department’s 5-year blanket purchase agreement (BPA) is excellent news for PLTR stock.
“We are grateful for our continued partnership with HHS and the confidence in our software it is showing by selecting Palantir for a long-term, wide-ranging BPA,” said Akash Jain, president of Palantir USG. “We are proud to provide the software backbone to some of the country’s most critical public health missions.”
Palantir’s made several moves to grow its healthcare business in recent months. Yesterday’s announcement indicates that the data analytics software company is on the right track to increasing healthcare revenues.
It started in mid-April when the National Health Service England (NHSE) announced that it would develop a 240 million British Pounds ($298 million) federated data platform (FDP) to allow multiple NHS databases to function as one.
The contract itself has two parts. The first is the FDP platform itself. The second is to provide the privacy-enhancing technology necessary to enable the platform to be effective while protecting patient confidentiality.
Palantir, which already has a working relationship with the NHSE, is widely believed to be the frontrunner for the contract.
At the end of March, the NHSX director of artificial intelligence (AI), Indra Joshi, left the UK government’s healthcare agency to join Palantir. Joshi ran the NHS AI Lab, which is charged with integrating AI technologies into the country’s healthcare system. She will work in Palantir’s UK unit, helping customers use AI to transform their businesses.
The latest news suggests aggressive investors might take an initial position. PLTR stock appears ready to go on a run. Down almost 43% year-t0-date, a move higher would be a welcome sight nearing the halfway point in 2022.
The share price appears to provide very healthy support at $10.50. On three occasions in 2022, it’s tested this level. On each occasion, it’s rebounded off that support line.
I continue to like Palantir despite the fact it’s having trouble generating a profit. However, if its healthcare business is any indication, patient investors should be rewarded soon enough.
PLTR stock remains a long-term buy for aggressive investors only.
On the date of publication, Will Ashworth 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.