Data services have never been more important and as Palantir becomes more commercial, it will have to face down some fierce competition.
This particular sector is an important service for many modern businesses as the process of data mining takes raw data and turns it into something much easier to digitize and work with. Many companies utilize this type of service as a way to understand how best to improve the inner workings of their business.
Palantir (NYSE: PLTR) is a highly controversial company that specializes in data mining. It is controversial because it mainly works with governmental agencies and more specifically, it has had a hand in the widely criticized U.S. deportation scheme ran by ICE as well as Britain’s post-Brexit immigration policies. Whilst Palantir has a unique set of technology on offer which is more suited to large corporations, it will need to expand into the private sector as it currently faces a PR nightmare of public backlash.
However, Palantir is facing tough competition in this data mining space. Below you can find two of its top rivals in this industry.
Alteryx (NYSE: AYX) does not make quite as many headlines as other software as a service (SaaS) companies that make headlines such as Zoom and Atlassian, but it is a stock worth thinking about as an investor. As a stock in a high-growth sector, this data company could be a good addition to your portfolio.
What makes Alteryx a serious competitor to Palantir is its excellence in data science and analytics conversions into easily accessible formats for any data worker to use. Amongst its customers, it can count manufacturing icon Hyundai, Chick-fil-a, Barnes & Noble, Cisco, and Coca-Cola. In fact, Coca-Cola’s senior business analytics manager downloaded Alteryx as a trial to solve a problem he himself could not solve. From then on he was a fanboy and kept up a subscription with this data company. If that isn’t a convincing advertisement, I don’t know what is…
While the COVID-19 pandemic was not too kind for Alteryx, causing its stock has been rather volatile over the last year, Q1 presented some wins. Expectations were topped across the board as revenue jumped 9% year-over-year to $118.8 million, while GAAP gross profit for the first quarter of 2021 was $107.9 million.
As COVID-19 related restrictions begin to ease and businesses start to come back to full operations, this company is likely to see its volatility reduce and growth continue as normal.
IBM (NYSE: IBM) is one of the most widely-renowned technology companies around and sells everything from hardware and software to cloud computing services. As the complete antithesis to Palantir, IBM has developed for itself a culture of trust among customers and partners alike, thanks largely in part to its longevity in the tech sector and first-mover advantage in computing. This reputation in itself could present serious competition to Palantir as IBM has a much larger reach in the global private sector.
IBM hasn’t been at its heights of late though, with its stock gradually declining in recent years as it struggles to keep up with tech competitors. Recently, IBM released its first-quarter results, treating investors to their first bit of optimism in a long time. The tech giant reported adjusted earnings of $1.77 per share on revenue of $17.73 billion, up 0.9% YoY — compared to a 6% annualized drop in the previous quarter.
“I think that the spend environment overall is improving, Matt. I think I can say that, definitely compared to the fourth quarter,” IBM CEO Arvind Krishna said in response to a question from an analyst on a conference call.
Moving forward in 2021 and beyond, IBM plans to focus more on cloud technology and AI services, which means that it will be spinning off its $19 billion technology consulting business as a separate entity. By refocusing on cloud computing and data, IBM could become the first in line for many businesses looking for cloud computing solutions and data analysis to go along with that.
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