A group led by
Palantir Technologies
received a contract from England’s National Health Service, the health system announced Tuesday.
The seven-year contract involves an investment up to £330 million ($414 million) in the health service’s federated data platform, a tool meant to simplify communication across separate NHS systems, and it has been awarded to a group led by data-analytics software company
Palantir
(ticker: PLTR), with support from tech company
Accenture
(ACN) and others, according to NHS.
“This award is the culmination of 20 years of developing software that enables complex, sensitive data to be integrated in a way that protects security, respects privacy and puts the customer in full control,” said
Palantir
CEO Alex Karp.
The stock was down 3.7% to $20.55 on Tuesday. William Blair analysts led by Louie DiPalma offered possible reasoning for that decline. In short, the value of the contract seems to be less than expected and there are more partners involved than earlier thought, suggesting Palantir could receive a slimmer piece of a potentially smaller pie.
“The U.K. NHS website previously indicated a total contract value of £480 million over 7 years,” the analysts wrote in a report Tuesday. “This morning’s press release indicates an investment of only £330 million over 7 years. In our view, the total contract value may still be £480 million when options are included.” The team rates Palantir stock at Underperform.
Despite the drop on Tuesday, shares have risen more than 200% this year—driven largely by the investor frenzy over artificial intelligence—and was on pace for its best year on record based on available data back to 2020, according to Dow Jones Market Data.
Over the last several months, multiple factors have boosted shares. In June, the company said it was awarded a multiyear contract worth up to $463 million to deliver technology to the U.S. Special Operations Command. In July, Wedbush analyst Dan Ives launched coverage of the company at Outperform, calling it “The Messi of AI,” referring to soccer great Lionel Messi.
In August, Palantir unveiled a $1 billion stock repurchase program and lifted guidance. Earlier this month, the company posted better-than-expected third-quarter results.
Write to Emily Dattilo at [email protected]
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