Although shares of big data analytics firm Palantir (NYSE:PLTR) are slipping on Tuesday, the company’s newly announced partnership with plastic waste upcycling specialist PlasCred Circular Innovations could move the needle over the long run. Undergirding the agreement is the broadened use of artificial intelligence (AI), which has significant implications for PLTR stock.
According to a press release, PlasCred and Palantir just announced a strategic collaboration. This partnership signifies a major step in integrating advanced AI technology into PlasCred’s environmental initiatives. In particular, Palantir’s digital intelligence could help the upcycling specialist refine its “supply chain logistics for plastic waste feedstock” as well as optimize its operations.
The collaboration will launch when Palantir deploys its Foundry and Artificial Intelligence Platforms at PlasCred’s patent-pending Primus plant as a beta test. This effort should demonstrate Palantir’s ability to “optimize operational efficiency, resource management, and decision-making processes.” The test should also assist in the designing and development of PlasCred’s upcoming Maximus facility.
“This collaboration is a testament to our commitment to working with mission-driven companies of all sizes across Canada, helping them unlock the potential of their data,” said Hanna Tomory, Palantir Canada Commercial Business Lead.
Initiative Bodes Well for PLTR Stock Long Term
While the market hasn’t shown it at the moment, this collaboration could represent a long-term tailwind for PLTR stock. While AI has been all the rage, most of the focus recently has centered on generative AI. However, given that this partnership is with a plastic upcycling specialist — which involves the reuse of plastic waste in higher-value products — Palantir could expand the relevance of its digital intelligence.
According to Allied Market Research, the global plastic recycling market size reached a valuation of $27.9 billion in 2021. Experts also project that, by 2031, the segment will expand at a compound annual growth rate (CAGR) of 8.7% from 2022 to a potential market value of $61 billion.
Per North Carolina State University, U.S. residents “generate more than 290 million tons of municipal solid waste each year.” While some of these waste products are recycled, nearly half are sent to landfills. However, through the deployment of AI — specifically machine learning — researchers are exploring mechanisms to integrate traditionally non-recyclable waste into renewable products, energy and fuel. While that effort differs slightly from plastic upcycling specifically, the relevance for PLTR stock is the same: Using AI to meet environmental goals.
Why It Matters
Although PLTR stock offers a compelling narrative, analysts currently remain pensive on shares with a consensus hold view on TipRanks. This assessment breaks down as five buys, five holds and five sells. Overall, the average price target for PLTR stock sits at $14.67, implying more than 15% downside risk.
On the date of publication, Josh Enomoto did not hold (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.
