In another groundbreaking move, Palantir Technologies (NYSE: PLTR) has once again proven that it is ready to take over the AI software industry. In addition to winning the Inaugural U.S. National Science Foundation Regional Innovation Engines grant, this firm has once again bagged an interesting deal with a division of one of Asia’s biggest conglomerates, the Hyundai group (OTCMKTS: HYMTF). Here’s what this means for PLTR stock.
The Deal
Palantir has recently announced that it signed a deal to expand its partnership with South Korea’s Hyundai Heavy Industries Group, which is one of the world’s largest shipbuilding conglomerates. According to the data analytics company, this deal is part of a previous agreement between the two companies, which was meant to digitalize South Korea’s shipbuilders. That deal was valued at around $20 million in 2022 and expected to run for over five years
The new deal is also in addition to existing agreements with the conglomerate’s refinery affiliate Hyundai Oilbank and construction machinery maker Hyundai Doosan Infracore, expanding Palantir’s footprint in South Korea. According to Palantir’s Chief Operating Officer, Shyam Sankar, the firm’s shipbuilding affiliates, including Hyundai Heavy, will use Palantir’s operating system, known as Foundry, to strengthen data-driven decision making and also improve their operations.
Under the new agreement, Palantir will help Hyundai’s maritime arm build unmanned surface vessels, or USVs, that can conduct reconnaissance for the world’s navies. Hyundai had said that previously developed USVs were difficult to operate in rough environments such as high waves, and had limitations that did not meet the mission performance capabilities of manned ships. That’s why, through this agreement, the goal of both companies is to develop a differentiated model by combining accumulated autonomous navigation technology with cutting-edge defense AI.
In simpler words, Palantir is helping Hyundai build automated navy ships. This tech might seem too futuristic, but robotic boats are already employed for tasks, including removing trash from Vietnam’s Mekong Delta and monitoring underwater volcanoes. The two companies plan to combine autonomous navigation software from Hyundai subsidiary Avikus and Palantir. Meanwhile, HD Hyundai Heavy Industries will be in charge of integrating the hardware and software, and developing the hull.
Looking forward, HD Hyundai and Palantir want to optimize their USV model for both the American and Korean markets, and develop an AI-powered platform to manage the vessels. But, it was not specified whether that AI platform would make a remote operator redundant. Hyundai called the venture “a game changer in future naval warfare,” and also said that it’d work with Palantir to develop combat drone boats, but that will come later.
Palantir’s Expansion Efforts
Palantir’s core mission is simple: to empower users to extract meaning from the ever-growing sea of information. By providing the tools to analyze and connect vast datasets, this data-analytics firm can help organizations make better decisions, solve complex problems, and ultimately, achieve their goals.
Palantir has been expanding aggressively, first in the United States, its western allies, and now in Asia. The data company is actively working to extend partnerships with countries like South Korea, both with the government as well as private sectors. It is also building its business in Japan and Singapore. And according to its Chief Operating Officer, Palantir will keep expanding so much that in five years, its Asia portion will grow to be a large part of the firm.
Right now, the United States takes up about 60% of Palantir’s sales, with Asia being part of the remaining 40%. However, as the data company seeks to expand in this region, it won’t be surprising if this number increases significantly over time.
Asia’s Demand for AI
Security is a major concern when dealing with sensitive information. Therefore, Palantir takes a multi-layered approach to data security. By using access controls, the company ensures that only authorized users can see specific data, while encryption safeguards the information itself. Its Foundry platform also keeps a detailed record of all data activity, allowing administrators to track how information is being used.
Asia is experiencing a digital revolution. Oppenheimer (NYSE: OPY) recently released a note that said that demand for AI in Asia will jump over 40% this year, but that’s not all, because countries like China, India, and South Korea are witnessing a surge in internet penetration, mobile phone usage, and digital transactions. And this translates to a massive amount of data being generated every day.
Similarly, Asian businesses and governments are also struggling to make sense of this data set, which is where Palantir’s Foundry platform comes in. Just like its digital revolution, economic growth across Asia is also fueling a demand for improved efficiency and innovation. Companies are looking for ways to optimize their supply chains, identify new market opportunities, and gain a competitive edge, and Palantir’s platform can be a valuable tool for businesses seeking to extract insights from their data to inform strategic decision-making.
Also, based on Palantir’s experience working with government agencies, the firm is a good natural fit for countries looking to leverage data analytics for defense, law enforcement, and border security purposes, and Asia has countries like this. Foundry’s ability to connect disparate data sources, like intelligence reports, financial records, and geospatial data, can also be a powerful tool for investigators and analysts working on complex cases.
However, while Palantir has the potential to succeed in Asia, it is also noteworthy that Asia is a complex market with varying levels of technological infrastructure and data privacy regulations. This means that Palantir will need to adopt specific strategies to navigate these differences.
How Asia Can Boost PLTR Stock
Like any new market, Asia presents a unique set of challenges and opportunities. In order to navigate this complex landscape, Palantir will need to understand how things work. The Asian market is far from monolithic. Regulatory environments, cultural nuances, and even technological infrastructure vary greatly between countries, so the company needs to take a localized approach, tailoring its offerings and messaging to resonate with each specific market.
This might even involve building partnerships with local companies familiar with the regulatory landscape and cultural sensitivities. Speaking of regulations, data privacy is a critical issue in many Asian countries, so Palantir will need to demonstrate a strong commitment to data security and compliance with local regulations. Transparency about data handling practices and robust encryption protocols will also be essential to building trust with potential customers.
Palantir does a lot of business with government agencies, but the new Asian deals prove that it has a great opportunity in the region’s commercial sector, which is currently booming and has a strong demand for AI. There’s a vast potential customer base in industries like finance, manufacturing, and logistics, all hungry for insights to optimize operations and gain a competitive edge. This means that Palantir needs to showcase success stories from similar companies in other regions in order for it to demonstrate the value proposition of Foundry in the Asian context.
It goes without saying that Asia’s booming digital economy, focus on innovation, and growing security concerns create a perfect opportunity for Palantir’s data analysis expertise. Therefore, by offering a platform that can help organizations unlock the hidden value of their data, Palantir is well-positioned to carve out a significant niche in this dynamic market. As Asia continues to grow and evolve, Palantir’s ability to adapt and cater to its specific needs will be the key to unlocking its full potential in the region.
PLTR Stock Forecast
On Monday, PLTR stock snapped their six-day losing streak, closing 2.5% higher at $20.98. The data analytics company has actually soared 141% in the last 12-months, easily outperforming the 20% gain of the broader S&P 500 Index. Wall Street analysts expect PLTR stock to continue growing, as 5 out of 19 analysts gave the stock a “Buy” rating or higher, 6 gave it a “Hold” rating, and 8 rate it as a “Sell” or lower.
For investors who are looking for growth, now might be a good time to invest in shares of PLTR stock, especially as the company continues to enter new industries, like healthcare, and expand into the global commercial space, reducing its reliance on government contracts.
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