Imagine at the onset of the pandemic, we didn’t have any of the digital solutions and the entire economy was shut down, what kind of living conditions would have been for all of us?  It certainly would feel apocalyptic!  Thank goodness to digital companies such as Amazon and Zoom.  They allowed us to have a somewhat normal life during the pandemic.

Now the economy is re-opening and people are trying to get back to “normal” life.  Our new  “normal” life will never be the same life we had before COVID.  The digitization revolution accelerated during the pandemic will not stop simply because the economy is re-opening.  The current crowded trade in value/cyclic stocks is creating a message as if the digitization revolution is no longer in force.  We would like to remind our subscribers that the digitization is in full force and it has a long way to go.

Palantir (PLTR) is a software company that has designed a suite of digitization solutions for the western governments and private sectors.  We are long PLTR stock as a long term holding and we talked about PLTR many times before.  Today we would like to analyze the investments PLTR had made in the recent months.

Palantir gets aggressive in SPAC investments, backing digital health, aviation and robot companies.

Palantir invested in:

  1.  Lilium–an air taxi company that’s developing a seven-seat, electric vertical takeoff and landing aircraft.
  2. Wejo–a U.K.-based developer of connected vehicle data systems.
  3. Sarcos Robotics — an industrial robot systems company.
  4. Roivnat Sciences — a drugmaker.
  5. Celularity– a biotech company.
  6. Babylon Health — a digital health company.

All the above mentioned companies are planning to use or are currently using PLTR platforms for their businesses.  The common theme is data.  All of them are depended on data to run their businesses.  Facebook took advantage of connected people’s data and made a huge business in the last decade.  Now we believe the connected data in the moving air taxi, moving cars, moving robots are huge businesses in this decade.  The connected data in life sciences is also a huge untapped field for the coming decade.

This PLTR investment portfolio is really exemplifying the future of a new digital economy.  These companies offer a preview of what will become part of our lives, just like how APPLE and AMAZON became part of our daily lives more than a decade ago.  APPLE and AMZAON will continue to grow, but their growth rate will not match these young companies.

These investments in the above mentioned digital companies further reinforced our conviction in PLTR and the direction of the new economy.

We feel perfectly content that we are not chasing the crowded trade in value/cyclic stocks.  We are going to hold on to PLTR with conviction and not be bothered by the volatility.  We actually trade around the core position and take advantage of the volatility.

Last Friday the market rallied based on the not so good jobs data.  Because of the not so good jobs data, the street is expecting the Fed to stay put, not changing the easy money policy sooner than expected.  But the rally didn’t have convincing volume, it’s anemic due to the lack of participation.

At this time, we still believe the market is not ready to rally.  It is buying time.  It will be range bound until the end of summer.

The AMC trading is a sideshow in a bull market.  The crazy trading in AMC probably has finished its course because the company has sold so many new shares that essentially relieved the short squeeze.  It’s about supply and demand in this trade.  It started as a short squeeze, now it is not because of the new supply of the AMC stocks from the company.