After Tuesday’s announcement that Palantir had won an $823 million contract with the U.S. Army, shares of the controversial software company have enjoyed a positive week.

This is despite a severe tech-focused selloff. (See Insiders’ Hot Stocks on TipRanks)

Although shares of PLTR may suffer additional damage if the sell-off continues, I am still bullish on this name due to its moat which is much wider than many investors believe.

Incredible Growth Opportunities

Palantir’s secrecy makes it difficult for investors to properly evaluate Palantir, as well as the potential market. Many growth investors are attracted to this level of secrecy because they want to be a part of one the most exciting technological trends in the future, big data boom.

There isn’t a lot of ways you can play this space. Palantir will be the dominant name for big data in the space, particularly after it won its most recent contract.

This company has developed an amazing data analytics technology similar to that used in Minority Report, a science-fiction movie.

It is clear that data will soon be a valuable commodity. It could be used in many industries. From optimizing corporate operations to next-generation warfare to predictive policing, it can have profound uses.

Palantir’s Moat

Palantir’s close relationships with the U.S. Government have, undoubtedly made it more opaque than some other easy-to-understand tech firms. However, Palantir’s focus on the U.S. government should still be considered a key component of the company’s business.

This moat may prove to be too strong for some competitors, especially those that are looking at the commercial side.

Trust and secrecy are essential for any collaboration with government agencies. With that, government contract work is a vertical that could prove too far out of reach for many of today’s non-government-focused tech firms, even those on the cutting edge of AI and data analytics technology.

Alphabet’s Project Maven (NASDAQ: ) faced many obstacles when trying to get a contract with Pentagon. This was around three years ago. The business was won by Palantir.

Palantir is looking to expand its offerings to non-government organizations so that the company can go on the offensive and not have to worry about losing government contracts.

Valuation

Another big win for a company that seems to have a growing moat, the U.S. Army’s latest contract is no exception.

However, PLTR stock is vulnerable to any further NASDAQ-led weakness, as shares trade at 33.1x sales.

Wall Street Take

TipRanks analyst ratings consensus rates PLTR stock as a Strong Buy. There are six analyst ratings: one Buy recommendation; two Hold recommendations and three Sell recommendations.

The average Palantir price target is $24.20. The price targets for analysts range from $18 to $31 per shares.

Disclosure: Joey Frenette is not a shareholder in any of the mentioned companies at publication.

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