William Blair Observes That Palantir and Databricks “Rarely Compete in Bidding” Due to High Total Addressable Market, Clarifying Their Recent Partnership

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Palantir’s Key Developments After AIPCon

Palantir Technologies Inc.(NYSE: PLTR), recognized for its AI-driven Software-as-a-Service (SaaS) offerings, has made significant strides following last week’s AIPCon event. The company announced the establishment of up to ten new commercial partnerships, including a noteworthy collaboration with its competitor, Databricks.

Insights on Palantir-Databricks Partnership

Analysts at William Blair have recently provided an in-depth analysis regarding the burgeoning partnership between Palantir and Databricks. This collaboration is projected to foster incremental synergies, combining Palantir’s renowned AI-enabled data intelligence platform, AIP, with Databricks’ Data Intelligent Platform (DIP).

Louie DiPalma, a William Blair analyst, explains the rationale behind this partnership, asserting that despite some overlap in services, the overall market potential remains expansive across various sectors. This enables both companies to capture market share from traditional data platforms and enterprise resource planning (ERP) providers.

Market Position and Customer Base

DiPalma observed that Palantir and Databricks seldom face off in competitive bidding situations due to the vastness of the addressable market. He states:

“We are under the impression that Palantir and Databricks rarely see each other in bidding situations because of this large addressable market.”

Moreover, the increasing synergy between the two firms is underscored by a mutual customer base that now includes major players such as BP and AT&T.

Regulatory Advantages and Collaboration

While acknowledging that Databricks’ Advana platform is a significant competitor for Department of Defense data analytics roles, DiPalma highlights the overall adoption of both platforms is on the rise. Notably, both companies stand to gain from a recent executive order mandating government agencies to implement payment tracking systems.

Recent AIPCon Highlights

During the AIPCon customer conference, Palantir also revealed new partnerships with prominent names. DiPalma reported:

“Palantir also announced other new customer logos at its AIPCon customer conference, including smartphone chip giant Qualcomm (QCOM $155.67) and Epirus, the leading provider of microwave counter-drone systems.”

Analyzing Palantir’s Growth Prospects

In summary, DiPalma examines the pros and cons for Palantir, commending its impressive projected revenue growth of 31% for 2025 and its robust operating margin of 45%, both of which rank among the highest in the software sector. However, he also warns about the stock’s “high-beta correlation with the Nasdaq-100, ” pointing to its susceptibility to broader market fluctuations.

Interestingly, Palantir has experienced a 50% revenue increase from 2022 to 2024, while its workforce has only expanded by 3%, demonstrating a remarkable efficiency in scaling services.

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