Palantir: Looking To Knock The Defense Prime Contractors Off Their Perch (Rating Downgrade)

Summary:

• Palantir, one of the high-flyers from the software space, is reportedly looking to lead a tech-driven consortium in winning a larger share of defense spend against the traditional incumbents.
• We highlight why PLTR is well-positioned to upend the status quo, which is currently largely a hegemony of a handful of prime contractors.
• Even though we like the Palantir business, we question if it can be a rewarding buy at these levels.
• Valuations look very dispiriting, the price action on the charts looks stretched, and institutional participation has been meager in the recent rally.

Introduction

The stock of Palantir Technologies (NASDAQ:PLTR), one of the more exciting and innovative software platform vendors around, has been on a tear in 2024; while other software and services stocks have done well enough to keep pace with the

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