Renaissance Technologies Portfolio: 10 Best Stocks To Buy

2. Palantir Technologies Inc. (NYSE:PLTR)

Stake Value as of Q2 2024: $1,000,922,777

Palantir Technologies Inc. (NYSE:PLTR) is an American technology company, headquartered in Denver, Colorado, that specializes in software platforms for data analytics. Its platforms are widely used by government agencies, financial institutions, and several large corporations. It is one of the best stocks to buy from the Renaissance Technologies portfolio, with the hedge fund having a stake of over $1 billion in the company.

The company delivered a robust show during Q2 2024, driven by remarkable strength in US commercial and government businesses. Revenue for the quarter soared to $678 million, registering a 27% year-over-year increase. Operating margin was recorded at 37%. Net income totaled a record $134 million, resulting in an EPS of $0.09, which beat analysts’ expectations of $0.06 per share. This was the sixth consecutive quarter of GAAP profitability for the company. It also ended the quarter with $4 billion in cash.

Palantir Technologies Inc. (NYSE:PLTR) closed 27 deals worth over $10 million or more during the quarter, which amounted to a total contract value in excess of $1 billion. Some notable deals included Tampa signing a seven-year expansion to deploy AIP for care coordination. Panasonic also entered into a three-year deal for AIP usage across its finance, manufacturing, and quality control operations. The company is also growing in international markets, which augurs well for its future trajectory. In 2023, NHS England awarded a £480m contract to Palantir for its federated data platform (FDP).

After a solid Q2, the company raised its guidance for the full year and now expects revenue in the range of $2.74 billion and $2.75 billion for 2024. The strong show this year so far has resulted in a bullish sentiment among investors about the stock. Carillon Scout Mid Cap Fund stated the following regarding Palantir Technologies Inc. (NYSE:PLTR) in its first quarter 2024 investor letter:

The top contributor to return for the quarter was Palantir Technologies Inc. (NYSE:PLTR). Sentiment improved on Palantir after it reported stronger than expected commercial customer revenue and free cash flow. U.S. commercial growth was especially encouraging, as U.S. commercial revenue was up by a large percentage year over year for the fourth quarter and U.S. commercial customer count grew nearly as much. We expect Palantir to become one of the premier artificial intelligence (AI) software providers, built on its Foundry and AIP platforms.

Having said that, a major chunk of Palantir’s revenue comes from government contracts. For perspective, it was 55% in Q2 2024. Some experts have raised concern over the company’s dependence on government revenue as it can be unpredictable and can change over time due to political climate and budget constraints.