Many companies offer fantastic products or services, but that doesn't automatically result in sales growth. Often, one of the most difficult tasks is introducing that product or service to potential customers -- and in such a way that they'll want to buy it. And this is where Palantir Technologies (PLTR -0.23%) today is scoring a major win, and one that could help the software company become one of tomorrow's artificial intelligence (AI) leaders.
Palantir offers its Artificial Intelligence Platform (AIP) to help customers aggregate their data and put it to use -- and the results often are spectacular, boosting efficiency and even paving the way to long-term growth. Palantir launched the program last year and has gained significant momentum thanks to its way of reaching potential customers. In fact, this strategy is Palantir's AI growth secret weapon.
Image source: Getty Images.
Making better use of data
So, first a bit of background on Palantir. The company actually has been around for quite some time -- 20 years -- offering clients its expertise in making better use of their data. And generally, government contracts have been the company's biggest revenue driver.
But Palantir's focus on AI and its increasing work with companies has helped it conquer more and more territory in the commercial space. In fact, in the most recent quarter, while U.S. government revenue advanced 12%, U.S. commercial revenue soared 40%. And U.S. commercial customer count climbed 69% to more than 260 customers.
All of this follows Palantir's launch last year of AIP, a platform that uses AI to help companies improve workflows, make key decisions, and more -- all by leveraging the power of their own data. And this brings me to the subject of Palantir's secret growth weapon, the element that's helping the company sign up new customers for AIP: Palantir's AIP Bootcamps.
These are workshops that allow a customer to start without any particular knowledge of the tool or what it can accomplish -- and develop a compelling use case for their business within days. So, the idea is potential customers are offered the opportunity to try out what Palantir has to offer without committing to a contract. Some might say it's risky, and that people may walk away without signing up for the service. But experience -- recent and past experience with other projects -- shows otherwise.
Seven-figure deals
In the first quarter, generally Palantir's slowest, AIP signups drove revenue in the U.S. commercial business. And bootcamps have been bearing fruit. Palantir offered the example of a major utility company signing a seven-figure deal just days after wrapping up a bootcamp and another example of a customer that signed on only one day into the bootcamp -- and increased the contract to a seven-figure one a few weeks later.
Palantir said that in the first quarter of this year, it closed 136 U.S. commercial deals compared to 70 during the same period in the prior year. And the company credits bootcamps for these successes.
Even when signups don't happen overnight, chief executive officer Alex Karp is optimistic. He compared the process to the experience he had years ago when building the Palantir anti-terrorism platform. Many of those initially offered the platform didn't sign on -- but a few years later, realizing that they couldn't do it alone, they returned to Palantir and signed contracts.
Growth down the road
So, the AIP bootcamps held today could generate growth down the road. In fact, even though bootcamps are a genius way of introducing Palantir's technology to potential customers and winning deals right away and over time, Karp says the company is in the "early days of figuring out how to actually get customers to buy our product."
This suggests the growth we've seen may just be getting started, too, and might have much farther to go as Palantir comes up with other ways of promoting AIP.
What does this mean for you as an investor? Palantir's earnings have taken off, and even though the stock price has slipped in recent weeks, it's still up 120% over the past year. It's impossible to predict the stock's direction in the near term, but over time, Palantir's secret weapon -- its AIP Bootcamps -- could drive more earnings growth and share price gains. And that's why now is a great time to get in on this innovative AI stock.
