What happened
Shares of Palantir Technologies (PLTR 0.56%) are falling today despite gains for the broader market. The company's stock was down roughly 4.8% as of 12:40 p.m. ET Wednesday in conjunction with the announcement of a new partnership with Jacobs Engineering Group (J 0.14%). Meanwhile, Jacobs' share price was up roughly 2.8%.
Palantir stock has been volatile in recent months and has seen particularly turbulent trading following its fourth-quarter report in mid-February, so it's difficult to say how much of today's movement is connected to the news of the Jacobs partnership or other catalysts at play.
It's possible that some investors see partnering with Jacobs -- rather than creating internally developed, fully owned solutions -- as a negative indicator about the company's growth prospects.
Image source: Getty Images.
So what
Jacobs published a press release today announcing that it had formed a partnership with Palantir to create data and technology solutions for the infrastructure and national security markets. The first software produced by the partners will be a data-analytics offering for public- and private-sector customers in water-infrastructure services. It will focus on using data analysis to improve the operation and maintenance of water and wastewater treatment plants.
That hardly sounds like bad news in its own right, but investors might be drawing negative inferences about what the collaboration suggests about Palantir's capabilities and growth outlook.
Now what
Palantir stock has slipped roughly 17% since the company reported its fourth-quarter results on Feb. 17. It managed to grow revenue 34% year over year to reach $433 million, but investors were broadly disappointed to see revenue from government customers grow only 26% year over year in the period.
Rather than viewing the new partnership with Jacobs as an opportunity to accelerate expansion in the infrastructure-services space, it seems the market could be disappointed that Palantir isn't readying solutions on its own or working with another prospective partner.
Palantir now has a market capitalization of roughly $24 billion and is valued approximately 12 times this year's expected sales and 59 times expected adjusted earnings.
