Technology stocks made headlines for most of the past year. The Nasdaq soared 43% as the pandemic accelerated the adoption rate of online education, remote work, and e-commerce.
Palantir Technologies Inc. (NASDAQ: PLTR) had an IPO in the midst of that growth. And Palantir stock popped as much 280% by January.
It’s fallen 30% in the last month. And a 5.4% dip in tech stocks seems to have produced a round of chicken littles screaming “sell.”
Don’t listen to them. A dip like this presents a buying opportunity in tech stocks – and in Palantir stock in particular.
This technology is so promising, you will still want to keep buying even if tech stocks drop further over the next few months.
That’s called “dollar-cost averaging.” When you consider how much this tech stock will be worth one day, buying small amounts at lower and lower prices during a dip is a gift.
Now, as many tech stocks are consolidating and economies are reopening, what sector of tech could be the next big thing?
Without question, it’s Big Data analytics.
Here’s why you should pay attention to Big Data right now, and the one stock that’s pushing the market forward.
Why Big Data Is Massive
Although Big Data has been in the picture for some time now, it is just beginning to come into its own. The combination of artificial intelligence and Big Data is changing the world as we know it, and the pace of change will accelerate from here.
From big government and large corporations to athletes and scientists working alone, everyone is using data to get results that make the world a better, safer place.
Of course, there are those that wish the world ill and have other uses for AI and data. But fortunately, we can use the same tools to hold the bad guys in check.
Collecting data has never been easier, now that the world is further online. Business and government agencies can collect data from cell phone usage, Internet of things devices, Internet traffic, cameras, microphones, aerial sensors, and almost countless data-gathering devices and methodologies.
That data can be used to predict trends, threats, and behavior patterns. It can be used to spot inefficiencies that need correction.
Big Data analytics is being used worldwide to win elections, help buyers understand commute times to work from their new homes, spot potential supply chain problems, potential winners against the point spread in sports betting, and a host of other possible uses.
If the question can be asked, Big Data can be used to answer the question and predict outcomes. Here is the tech stock leading the charge in that area.
Best Tech Stock to Buy on the Dip
Palantir appears to be way ahead of most competitors when it comes to Big Data analytics. It would make sense, since it has worked with the Department of Defense and the U.S. Intelligence Community.
In the early days of its existence, Palantir used Big Data to uncover several Chinese spy rings worldwide and connect U.S. intelligence agencies’ databases for the first time.
Palantir was so far ahead of its time in data analytics that almost all venture capital passed on funding the company initially. The lead investors were venture investor Peter Thiel and the Venue capital division of the Central Intelligence Agency.
Today, Palantir still works with the U.S. government, but it also now works with large corporations, hedge funds, the scientific and healthcare community, and law enforcement around the world.
Palantir played a huge role in dealing with the COVID-19 pandemic for many countries. Government agencies and healthcare officials used Palantir’s software to predict and manage outbreaks, track patients, manage supply chains, operate hospitals at peak efficiencies, and inject fiscal stimulus into local economies that needed it most.
In all, 10 national governments, 100 major corporations, and countless public health agencies used Palantir’s Big Data software to manage their way through this crisis.
Palantir has recently announced partnerships with Amazon.com Inc. (NASDAQ: AMZN) and IBM (NYSE: IBM) to offer Palantir analytics software to their cloud customers. Both contracts have the potential to drive enormous profit growth.
Palantir continues to expand its presence in the corporate markets as 2021 begins. In 2020, it generated 107% revenue growth from U.S. commercial customers. In the last three months of the year, Palantir signed several large deals across the automotive, energy, healthcare, insurance, mining, and shipping industries.
Commercial contracts are now 44% of total revenue for Palantir.
That means that government is still 56% of a growing revenue base. Last year, Palantir generated 77% revenue growth from our government customers. It is working closely with the government and intelligence communities to fight the next war, which will be data-centered – more digital than any other conflict in our past.
Palantir also expanded its relationship with the U.S. Food and Drug Administration. It is working with the FDA to ensure manufacturers comply with agency rules and regulations. It is also using analytics to enhance drug reviews and speed up time to market while maintaining the highest safety standards.
Accelerated drug approvals have been a massive part of fighting back against COVID-19.
Palantir stock is down 30% in the last month, as the broader market has taken a slight dip. But analysts expect this stock to grow by around 50% a year for the next five years.
One gives it a $40 growth target over the next 12 months, which is a 53% bump from today’s $26.
Given the expanding role of Big Data and what we see as Palantir’s competitive advantages, we think the stock has the potential to become a massive winner among growth stocks.
Palantir is one of those rare companies that has the potential to be a rare 100 to 1 long-term winner.
— Money Morning Staff
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Source: Money Morning