InvestorPlace contributor Joseph Nograles recently reminded us all to be greedy when others are fearful. Can we apply this old Warren Buffett concept to Palantir Technologies (NYSE:PLTR), though? The answer is yes, as PLTR stock is underpriced and investors ought to put it on their radar and in their portfolio.
As Nograles pointed out, analysts at RBC upgraded Palantir to “sector perform” from “underperform” and increased their price target to $12 from $9. This upgrade makes sense, as governments increasingly need to manage and protect their data and public entities often turn to Palantir for assistance.
On the other hand, PLTR stock has been under negative pressure lately. Despite RBC’s upgrade, Wall Street just doesn’t seem convinced of Palantir’s prospects for a bright future.
But then, if you’re truly ready to be greedy when others are fearful, then the drawdown in the Palantir share price shouldn’t bother you. Indeed, the stock could be a prime addition to your tech-focused portfolio in 2022.
What’s Happening with PLTR Stock?
When PLTR stock topped out at $29.29 last year, it was hard to imagine that it would ever fall to the $10 area. Yet, this happened not long ago.
So, if you’ve ever fantasized about buying the shares at 2020 prices, you might get a second chance today. Buying when others are selling can be a great long-term strategy, but only if the stock represents a value-added company.
Palantir definitely fits that description as the company has numerous big-money clients. Among the best of those clients is none other than the U.S. government (USG).
In one example, Palantir is expanding its collaboration with the U.S. Centers for Disease Control and Prevention (CDC). This expansion is to take place through the outbreak response and disease surveillance solution for the Data Collation and Integration for Public Health Event Response (DCIPHER) Program.
The partnership is in support of public health surveillance and outbreak response, according to William Kassler, chief medical officer for USG at Palantir. No dollar figure is mentioned in the press release, but it’s probably a highly lucrative deal extension for Palantir.
Providing the Software Backbone
There was, however, a dollar figure attached to Palantir’s recent deal with the Department of Health and Human Services (HHS). Reportedly, HHS selected Palantir for a five-year blanket purchase agreement (BPA).
The $90 million BPA will give HHS officials access to Palantir’s platform to support their work. Thus, they’ll benefit from Palantir’s data protection features and innovative security technology. Akash Jain, president of Palantir USG, is understandably excited about the HHS contract. “We are proud to provide the software backbone to some of the country’s most critical public health missions,” Jain said.
Notably, this contract is separate from Palantir’s work with HHS and its agencies on health missions related to Covid-19. Still, it’s a huge step forward in favorable business relations between Palantir and HHS.
It’s interesting that Palantir recently announced deals or deal expansions with the CDC and HHS. These are both health-related government agencies. Perhaps Palantir is carving out a lucrative niche for itself, providing protective services for health-related data.
In any event, it seems that Palantir just keeps getting one valuable contract after another. Soon enough, investors should start to get enthusiastic about Palantir again.
What You Can Do Now
It seems irrational that PLTR stock should be trading anywhere near $10. The company is firing on all cylinders, securing and expanding its business arrangement with government agencies. Therefore, don’t hesitate to get greedy by investing in Palantir while others are fearful. In due time, the market should get greedy with Palantir again and you might turn a nice profit.
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