Palantir Technologies’ stock has surged more than 5% on Wednesday after the company announced a partnership with Rackspace Technology to help enterprises deploy and operate Palantir’s AI platforms.
Rackspace also witnessed an even more dramatic rise in the market. The company’s stock advanced by as much as 217% to $1.33 during the same trading session, marking one of its sharpest single-day rallies in recent years.
The announcement comes just a day after Palantir said in an X (formerly Twitter) post that it is moving its headquarters from Denver to Miami, Florida. Following the news, its stock rose around 1% in pre-market trading on Wednesday.
While the tech company did not mention the exact reason for relocating its headquarters to Florida, a CNBC report suggests that Florida offers many benefits, including a favourable tax environment, which is prompting several other companies to shift their base to the state.
Partnership to boost AI deployment
The partnership will combine Rackspace’s governed operating model with Palantir’s Foundry and Artificial Intelligence Platform (AIP) to accelerate AI-driven business outcomes for customers, according to an exchange filing.
Rackspace will provide implementation expertise, cloud hosting, and data migration support to help organisations deploy AI use cases with Palantir in production within weeks instead of months or years.
As part of the collaboration, Rackspace has trained 30 Palantir engineers to provide data migration services and elaborate plans to scale to over 250 engineers in the next 12 months.
As per the filing, the companies are also working to run Palantir software in Rackspace’s Private Cloud and UK Sovereign data centres, which is particularly crucial for regulated industries with strict data sovereignty requirements.
Palantir’s stock trend
The Nasdaq-listed company has been under sustained selling pressure for quite some time. Over the last one month, the stock has been 17% down, while in the last six months, it has shed 19.67%, as per data available on the exchange.
However, on a year-on-year basis, the stock is still up 12.26%, indicating that despite recent weakness, it continues to hold on to part of its longer-term gains.
The company announced its fourth-quarter results this month, with its revenue growing 70% from $827.5 million in the year-ago period. For the fiscal year, sales at the Denver-based firm totalled $4.48 billion.
It surpassed Wall Street’s fourth-quarter earnings estimates and issued upbeat guidance, due to a significant boost from skyrocketing demand for AI systems and broad retail investor enthusiasm, CNBC reported.
Palantir, which creates software and data tools sold to businesses and government agencies such as the Department of Defense, the Internal Revenue Service and the Department of Homeland Security.
Why was Palantir under pressure?
According to immigration and tech activists in Colorado, the company’s decision to relocate is a result of its sustained organising.
Juan Sebastian Pinto, a former Palantir employee and organiser for AI regulation in Denver, said that a coalition of organisations and unions has mounted pressure on the company’s presence in the city.
He further added, “Colorado has rejected the values of Palantir – the values of an economy built on exploitation of people’s data, whether it’s for warfare or for immigration enforcement.”
Palantir has also been under fire for developing an alleged tracking tool employed by the US Immigration and Customs Enforcement (ICE). The tool, dubbed ELITE, reportedly procures data from Medicaid and other government databases to generate dossiers and “leads” on people that ICE believes may be deportable, the Guardian reported.
