JWCC Miss, Healthcare Contract Rain | Palantir Bullets #4
This week's Palantir developments and the crowned “Tweet of the Week”
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Palantir is not included in the $9bn DoD JWCC Contract. The follow-up of the famous JEDI contract, which aims to support the DoD cloud infrastructure has been awarded to AWS, Microsoft, Oracle and IBM. Palantir’s exclusion is not necessarily bad. From the information we have, the JWCC contract relates to the Cloud infrastructure (IaaS and PaaS) which is the backbone on top of which SaaS applications, like Palantir, are run. Palantir, along with AWS and Microsoft is the only player having a DoD IL-6 authorization to run SaaS even at a “top secret level.” The positive side is that if $9bn is spent on cloud infrastructure, basically computing power, we could expect that the DoD plans to spend a substantial amount on SaaS applications as well. The current multi-cloud setting is a perfect environment for Apollo to thrive. Meanwhile, a curious hint comes from Palantir’s Government Contracts Lead.
Palantir achieved a $443mn contract for 5 years with the Centers for Disease Control and Prevention (“CDC”). CDC has been a Palantir client since 2010 and used Palantir’s Tiberius to support the Covid vaccine distribution. Therefore, we can consider this a contract renewal with expansion, which underlines how profitable a relationship with a client could become over time. The contract, which represents 9x the avg. Government Revenue per client should support Palantir Government’s acceleration towards the guided 30% CAGR.
Palantir partners with Tampa General Hospital to improve patient care. Just one week after the partnership with Cleaveland Clinics, this contract is more proof of Foundry’s success in Healthcare. In the press release, it was highlighted how Foundry helped Tampa navigate the adversities caused by Hurricane Ian: shocks make great software shine.
Palantir partners with Crisis24, a leading integrated risk management firm. Details of the deals are not disclosed, but I don’t expect them to be significant as Crisis24 has only ~1.100 employees. However, its parent company, GardaWorld has ~120.000 employees and is a “long-standing security partner of choice to some of the most prominent brands, Fortune 500 corporations and governments.” If Palantir executes well, the potential reach is immense.
Alex Karp sells shares. This was an anticipated sale for tax obligations from RSU vesting, nothing I am worried about, similar to last week’s Shyam sales.
Karp, interviewed by CNBC, expresses Palantir TAM could be “north of $900bn.”This represents a huge difference from the ~$120bn Total Addressable Market indicated in the S-1 filing at DPO. I think that’s an exaggeration or at least does not refer to the current TAM as the SaaS market now is ~$200bn. However, this doesn’t change the essence: Palantir can penetrate potentially everywhere software is deployed. “You don't need to know a man's weight to know that he's fat.” - Buffett.
Palantir is going to participate in Consumer Electronics Show (CES), which is considered the most influential tech event in the world. Over 100.000 people are expected to attend the event. Palantir proved its solutions work across different industries and use cases, now it’s only a matter of increasing brand awareness and scale (PLTR: Sell Sell Sell).
Related Tech trends/Macro:
ServiceNow CEO: “In this environment, the name of the game is customer value creation.” Palantir, as the recent Foundry Con testimonials support, excels in this game.
AI could unlock up to $2trn in Supply Chain Management and Manufacturing (McKinsey). This is the area where Palantir is particularly strong.
Thomas Bravo, a top private equity firm, raises $32bn to invest in tech. Private Equity is typically the real “smart money” in the market. I consider it an encouraging sign supporting the idea that tech valuations are attractive.
Bucco Capital@buccocapitalPublic investors: Every software business is a zero Thoma Bravo
12:47 PM · Dec 7, 202215 Reposts · 225 Likes
Tweet of the week
Beep.
Amazing and super useful as always, Arny!