Imagine a tech CEO who lives far from Silicon Valley, meditates frequently, and has a Ph.D. in social theory.
Instead of obsessing over the latest venture capital trends, Alex Karp is reflecting on ethical dilemmas and wrestling with the tension between privacy and security.
As CEO of Palantir Technologies (PLT) Karp is responsible for leading one of the most secretive yet influential companies in the world. The firm specializes in big data analytics and works closely with government agencies on some of their most sensitive projects.
Karp's leadership style is as unconventional as his company's mission. He doesn't fit the stereotype of a charismatic tech mogul with a meticulously crafted public persona. Instead, he is known for his candor and scathing statements.
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He has openly criticized the tech industry for its reluctance to work with the government, arguing that companies should have a responsibility to support their countries rather than simply chasing profits.
“Now Silicon Valley is creating micro-communities that break the consensus of broader society and at the same time tell the average American, 'I will not support your defense needs,' and then sell their products that are anti-US,” Karp said. in an interview. with CNBC back in 2019.
One analyst said Palantir's stock price could rise
TheStreet Pro analyst Ed Ponsi portrays Karp as potentially the next “rock star” CEO, comparing him to figures like Steve Jobs and Elon Musk.
“This was Karp's moment on the big stage. Like Jimi Hendrix in Monterey or Bob Dylan in Newport, Karp has just entered the consciousness of the general public.” Ponsi wrote last month, just before Palantir joined the S&P 500 index.
Ponsi correctly anticipated an increase in Palantir's stock price. On September 23, Palantir replaced American Airlines. (AAL) in the S&P 500 index and its share price has since increased more than 16%.
Now, Ponsi has an even bigger goal.
“I've decided to get caught up in the frenzy and expand my position in Palantir, even though the stock is trading at an all-time high,” he said. wrote on October 10. “It's a strong stock in a strong market.”
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The S&P 500 and Dow Jones closed at record highs on Oct. 11, boosted by strong bank earnings and inflation data that raised hopes of a Federal Reserve rate cut in November.
“At the bottom of this chart, Palantir's RSI (relative strength index) of 77 reveals a stock that is overbought,” Ponsi wrote. An RSI reading above 70 places a stock firmly in the overbought camp.
“This fact does not discourage me at all. Upon closer inspection, Palantir was overbought for most of September, and this did not slow the stock's rise,” he added.
What is driving Palantir's growth?
Palantir shares are up 162% so far this year. The growth is driven not only by the CEO's unique style and personality, but also by the company's growing role in ai and increased demands.
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Palantir develops data analytics software that improves operational efficiency and increases business productivity.
Palantir's software is widely adopted by companies across a variety of industries, including Morgan Stanley, Airbus, and Merck.
However, the company's largest customer is the US government, which accounted for about 41% of its second-quarter revenue. The FBI, CIA and other US agencies use Palantir to collaborate and optimize their operations.
Palantir reported strong second-quarter earnings and raised its full-year forecast in August, driven by high demand for its artificial intelligence platform.
The company earned an adjusted 9 cents per share in the second quarter, up 80% year over year and beating analysts' estimate of 8 cents. Revenue rose 27% to $678 million, also beating analyst forecasts.
Meanwhile, net income reached $134 million, the largest quarterly profit in the company's twenty-year history, Karp said.
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“The steady increase in our profits reflects unbridled demand and understanding of the capabilities of our software,” Karp said in a letter in August.
“Our growth in the commercial and government markets has been driven by a relentless wave of customer demand for artificial intelligence systems that go beyond the merely performative and academic.”
The company now projects third-quarter revenue between $697 million and $701 million, while analysts estimated $679.1 million. Palantir also raised full-year guidance to $2.742 billion to $2.75 billion, up from $2.677 billion to $2.689 billion.
Palantir will release its third-quarter results after the close on November 4.
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