Palantir (NYSE:PLTR) announced Tuesday morning that it will be providing additional services to 3M (NYSE:MMM) as part of a new, multimillion-dollar deal. The industrials giant will be expanding its use of Palantir's Foundry analytics platform as part of an effort to improve supply chain operations.
3M management stated that Foundry services had helped it monitor and adapt to demand changes across its product categories amid the pandemic, and it looks like Palantir will play a significant role in the company's ongoing digital transformation. Winning an expanded contract with 3M bodes well for the analytics software company.
Palantir has been a hotly contested stock since going public last September. The tech stock is up roughly 180% from its $10 opening price even after a recent pullback, and investors and analysts remain split on whether the current valuation is justified.
Bears have pointed to the company's reliance on government contracts as an indication that its current growth will be difficult to maintain, with this segment currently accounting for roughly three quarters of its sales. On the other hand, Palantir has been aiming to build its business in the commercial space by breaking down components of its Foundry analytics platform into smaller, less costly offerings. It seems to be making progress with that approach.
In addition to deepening its working relationship with 3M, the company recently announced a partnership with IBM, and previously won deals with companies including BP, Rio Tinto, and PG&E. While debate about Palantir's growth-dependent valuation is unlikely to be resolved in the near future, winning increasing support from commercial customers reflects well on the efficacy of the company's Foundry analytics platform