Could Palantir’s R1 Deal Be the Catalyst for a Stock Surge?

Key Points

• Palantir stock is finding support at a key level after announcing a deal with R1 to improve healthcare financial operations.
• The two companies are partnering to deal with the rising costs associated with revenue cycle management (RCM).
• While institutional investors find PLTR stock’s valuation distasteful, they may have no choice but to start buying PLTR stock.

Palantir Technologies Inc. NASDAQ: PLTR stock is finding support around its 15-day simple moving average after the company announced a partnership with R1 to launch R37, an AI-driven lab focused on improving healthcare financial operations.

This is the latest in a series of new and renewed contracts that Palantir has announced in the last 30 days. Each of these contracts adds to the company’s top line, which is well below its lofty valuation.

That valuation is why PLTR stock is falling back to earth in 2025 after a meteoric rise that started in 2023. To be fair, the stock is still up more than 13% for the year. That’s better than many technology stocks, including those of the Magnificent Seven, but it’s down 18.9% in the 30 days ending March 20 due to concerns about the stock’s lofty valuation.

However, the deal with R1 may be just what the doctor ordered in terms of arresting the stock price decline. Not only is this another win on the commercial side of the business, but it also positions Palantir as a potential solution in a sector that needs transformation.

Tackling a Tough Problem

There’s a lot of talk about waste and inefficiency in the federal government. However, one area in the private sector that is notorious for unchecked rising costs is revenue cycle management (RCM). This is the process that every organization, from the doctor’s office to hospitals, uses to manage financial operations related to billing and collecting revenue for medical services. Those operations include the reconciliation of insurance payments, write-offs, contract adjustments and, of course, patient payments.

But the challenges related to healthcare reimbursement are becoming impossible to ignore. Providers are facing economic pressures at a time when administrative healthcare costs account for 40% of U.S. hospital expenses.

R1 is a leader in RCM with proprietary technology that helps healthcare providers manage costs, increase revenue and streamline operations. Artificial intelligence is becoming a key element in that process, and that’s where Palantir’s cutting-edge AI tools come into play.

Remove Ads

The partnership will see the two companies develop intelligent automation solutions to address the urgent challenges of healthcare reimbursement with speed and scale.

In an interview with Bloomberg, Palantir chief executive officer (CEO) Alex Karp remarked, “R1 brings unmatched ambition to an area of healthcare that desperately needs it,” said Alex Karp, co-founder and CEO of Palantir Technologies. “By embedding our engineers directly within R1’s operations, we can rapidly scale intelligent automation and drive measurable impact at speed—ultimately enabling providers to focus on delivering better patient care.”

The Real Driver for Palantir’s Future Stock Growth

Palantir is frequently lumped in with meme stocks. This dates back to when the company went public as a direct listing in 2020. That was a way that Palantir made its stock accessible to retail investors, who held heavy bags before watching the stock lift off in the second half of 2023.

Since then, it’s been a great ride, but retail investors won’t drive the next leg up. The institutions will be leading the way. The “smart money” stayed far away from PLTR stock while the stock was trading under $10. But it’s become impossible to ignore, even if the valuation is distasteful for many investors.

This inevitability can be seen in the Palantir analyst forecasts on MarketBeat, which show price targets rising well above the consensus even as the stock has drifted lower. While the consensus price target as of March 20 was $74.45, a 14% discount to its closing price, many analysts have raised their price targets. And that list now goes beyond Dan Ives of Wedbush. In fact, Loop Capital, while lowering its price target from $141 to $125, still has a higher price target than Ives, which has a $120 target for the stock.