Palantir (NYSE:PLTR) debuted on the stock market earlier this month.

Valued at over $20 Billion upon entering the New York Stock Exchange, Palantir shares currently trade at $15 each. This follows after competitor Snowflake’s (NYSE: SNOW) wildly successful IPO, in a series of very lucrative tech trading debuts this quarter.

A Success Story from the Beginning

Fewer tech companies are more shrouded in secrecy than Palantir. Initially a purveyor of data management, the firm built defense software for the US military and intelligence agencies. Palantir was catapulted to success due to its backing from John Poindexter, Reagan’s former National Security adviser during the Iran-Contra scandal. Upon returning to the Pentagon to consult on its 9/11 response, Poindexter met with Palantir Co-Founders Peter Thiel and Alex Karp to discuss Palantir’s initial build.

In tandem with Poindexter and companies who worked on surveillance project ‘Total Information Awareness’, the Silicon Valley ingenues developed a platform that could ‘do it all’. They developed a data mining programme that could use analytics to build products for US defense and intelligence services. It’s primary interface, Gotham, enables users to identify patters hidden deep within data sets.

Poindexter cites the ‘initial design and the ideas [Thiel and Karp] had for the user interface’ had contributed to Palantir’s current success. The platform can now digest mountains of data sets collected by soldiers, spies and the police, ranging from: fingerprints, signals intelligence, tips from informants and financial records. Gotham is able to interpret these data sets and discover hidden relationships, underground criminal or terrorist networks, and even predict future attacks.

Where Palantir Stands Now

In the first half of 2020, Palantir revenue rose by 49%. It exceeded previous estimations on its final valuations, due to the fact that its software has become indispensable to customers. Mark Cash, equity analyst at Morningstar notes that Palantir’s top position in the data industry is cemented for the long-run as reliance on its software increases.

“Data integration at this scale for the government is very complex, and I think if you tried to stop spending on that and it just goes away, you’re going to have some big problems…We think it’s very hard to switch away from once you’re in as a customer”

Palantir has grown into a company of roughly 2400 employees, most of them engineers who write data collection software and embedded analysts who interact with Palantir’s customers. Palantir is now a global success story, which weaves thousands of databases across various agencies.

Reasons for Palantir’s Rising Success

Market Positioning

Co-Founders Thiel and Karp have successfully positioned Palantir as the pro-military arm of Silicon Valley. Its unique branding has helped Palantir secure investors in Manhattan Venture Partners, Keith Rabois and REV. Further, its longstanding association with the CIA, the NSA and the Pentagon’s Special Operations Command has cemented its reputation as the USA’s premier data partner. It boasts almost $1.5 Billion in federal data contracts alone.

Expanded Product Portfolio

Palantir has since expanded its services to global firms, through its private sector platform, Foundry. Through this, executives can now access data funnelling, predictive and visualisation capabilities to aid in projects ranging from military strike missions to building jets.

Palantir’s IPO Breaks Tradition

Palantir’s direct listing differed from traditional IPO, in the sense that it did not include a primary share offering or offering price. The listing included an ‘F’ share for founders including Thiel, who was an early investor in Facebook.

The COVID-19 Effect

Palantir has been seeing higher traction from the public healthcare space during the pandemic. National healthcare providers and hospitals all over the world widely use Palantir’s service to track and trace the spread of the virus. The software giant is now developing tools to solve logistical issues with disseminating the COVID-19 vaccine to the masses.

Looking Towards the Future

In 2020, the field of intelligence is clearly at an inflection point. Ahead, the future of intelligence and knowledge industries will be shaped by the powerful effects of Big Data and machine learning.

As cloud-based supercomputing and Applied Data Intelligence becomes evermore essential to both defense and corporate infrastructure, Palantir’s future success is almost assured. It’s 2020 financials point to the fact that the software firm is primed for expanding growth. The company has stated that the total remaining deal value of its government contracts is at $1.2 Billion; which excludes almost $2.6 Billion of ‘indefinite delivery’ and ‘indefinite quantity contracts.

However, Palantir has raised eyebrows among critics, and will continue to do so. Its success has been overshadowed by privacy concerns, as the firm’s software tools enable unmitigated surveillance and analysis of personal data. Amnesty International issued a report saying that Palantir failed in its responsibility to protect human data rights with inadequate due diligence measures.

Palantir’s success is qualified by perception. On its potential for future success, Bernstein analyst Douglas Harned suspects that Palantir’s success on the market will end as quickly as it began: ‘If Palantir is loved in the way the Kardashians are loved – well, the Kardashians are not going to be famous forever. So short the [Palantir] stock while they’re famous – and just wait for their 15 minutes of fame to end’.