1 Stock That Could Be the Next Big Thing After Palantir

When it comes to government relying on AI companies, Palantir seems to attract most investor attention and with good reason too.

Palantir is famous for big data analytics and analyzing massive amounts of information to make informed insights that can help government primarily, and increasingly commercial enterprises in sectors ranging from healthcare to finance.

The firm’s Gotham and Foundry platforms are widely relied upon and have produced large software contracts. As the company expands beyond the government sector to capture more market share in the private arena, investors have become ever more excited about it because Palantir can increasingly predict outcomes, and hone in on key insights, such as during the Ukraine war, to help the much smaller country identify crucial weaknesses in Russian defense systems.

The wide berth of applications has resulted in a growing top line through a combination of software licenses and subscriptions, resulting in an attractive recurring revenue model that has attracted the likes of Stanley Druckenmiller.

Yet, as attractive as Palantir has been, another enterprise that has a similar target customer base may be under-appreciated and have even more upside potential.

Key Points

• Palantir excels in big data analytics for government and commercial sectors, securing large contracts and attracting investors with its predictive capabilities and recurring revenue model.
• Parsons offers similar government contract benefits but integrates cybersecurity with physical infrastructure, providing stability and lower share price volatility compared to Palantir.
• Analysts predict Parsons’ share price could rise by 16.7%, driven by its growth in space, infrastructure, and cybersecurity, along with long-term government contracts.

An Alternative to Palantir

If you missed out on Palantir, consider Parsons, an engineering and construction firm that also has a technology play to it, specifically in the form of cybersecurity and intelligence.

Like Palantir, it has a heavy reliance on government contracts, especially in the defense sector but also in infrastructure. Where Palantir is primarily software focused, Parsons is involved in both digital and physical infrastructures, including transportation and even space defense.

What makes Palantir attractive now is also what makes Parsons attractive: net income is forecast to grow this year. But Parsons stands out because, unlike Palantir, its share price generally trades with much lower volatility, so it’s more attractive to those seeking a bit more stability.

How High Can Parsons Go?

If analysts are right, Parsons has the potential to seriously by almost 2x what Palantir is forecast to do. The consensus forecast now is for the share price to climb all the way to nearly $90 per share, which would represent a percentage increase of 16.7%. By contrast, Palantir is expected to go up by less than 9% to fair value.

Both companies trade at high earnings multiples so it’s hard to get too excited about either on a multiples basis but Parsons does have a few other things going for it.

Firstly, it is forecast to keep growing in both the space and infrastructure arenas. Secondly, it is a leader in integrating cybersecurity into cutting-edge technologies, and has exposure to a broad number of areas from space defense to infrastructure. Thirdly, it enjoys a steady and predictable stream of income stemming from long-term government contracts.

Technically, it’s also closing in on support and has the potential to bounce and follow through. We’ll be watching to see if it does.