Aug 09, 2023

Why Palantir Is Launching Into Its First Stock-Buyback Program

Buybacks VerityData

Less than three years after going public, Palantir Technologies Inc. has taken its latest step toward maturity with the announcement of a $1 billion buyback program.

Palantir PLTR, -10.50% is hardly the first among relatively new public companies to institute a buyback program, notes Ali Ragih, a senior research analyst at VerityData, though many of the other high-profile examples are from early 2022, when tech stocks were falling. Zoom Video Communications Inc. ZM, -1.48%, DocuSign Inc. DOCU, -0.76%, DoorDash Inc. DASH, -2.66% and Airbnb Inc. ABNB, -1.20% all adopted programs in the first half of that year.

The buyback announcement from Palantir, however, comes during a roaring year for tech stocks, with Palantir’s in particular up more than 160% so far in 2023. Still, Ragih doesn’t see the move as unusual for a company like Palantir that’s still early in its life on the public markets.

“At some point in the game, companies have to shift from investing all their money in [capital expenditures] to returning capital through buybacks,” which tend to precede dividends, he said.

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