Palantir (NYSE:PLTR) just may be one of the most controversial tech stocks in the world, founded by Peter Thiel in 2003. However, in 2020, the company went public in shining a light on many of its previously secretive operations. Palantir and its data analysis technology has been connected to Donald Trump, Cambridge Analytica, and the tracking down of Osama Bin Laden. PLTR stock quickly shot up in value after its 2020 listing, but it peaked at a $39 close on Jan. 27.

Since falling from January’s high close, PLTR stock has yet to cross back over the $30 threshold. At the current opening of  $24.43 value, Palantir shares have delivered a 165% return in just over one year. The question for growth-focused investors is whether PLTR stock is worth considering for their portfolios. 

Q2 Earnings Show Revenue Momentum

The first place to look is financials. The company reported its second quarter earnings in August, and the situation looks quite good from that perspective.

Total revenue for the quarter hit $376 million, up 49% year-over-year. U.S. commercial revenue was up 90%. Palantir added 20 net new customers in the quarter, and closed 62 deals worth $1 million or more. 21 of those deals were worth over $10 million. Government revenue was up 66% YoY, hitting $232 million. This includes new deals with the U.S. Army, Air Force and Coast Guard, highlighted by a deal with the United States Special Operations Command (SOCOM) which is worth $100 million over two years. Adjusted, diluted earnings per share was 4 cents.

The company raised its full-year 2021 outlook. In addition, it issued long-term guidance that projects annual revenue growth of at least 30% for 2021 through 2025.

The market reacted positively to this news, with PLTR stock popping over 11% the next day. Given its financial performance in Q2 and the guidance issued, PLTR seems well-positioned to deliver on long-term growth.

However, this situation is slightly more complicated than it might appear on the surface.

Security and Co-Founder Concerns

Remember in the intro when I was taking about controversy? Few tech companies are steeped in it the way Palantir is. The company has been tangled in Cambridge Analytica’s social media data harvesting scandal. Billionaire co-founder Peter Thiel has been a vocal supporter of former President Donald Trump. In addition, Palantir’s technology has been used for a range of controversial projects including migrant surveillance systems, predictive policing, and battlefield software.

Between its co-founder, its technology, and its customers, Palantir hits a vast swath of hot-button social topics. Perhaps, its association with some of these customers and applications have the potential to impact the value of PLTR stock — especially if there is societal pressure to reduce Palantir’s presence or cancel projects altogether.

Consider this question from New York University Stern School of Business professor Scott Galloway:

“Is Mr. Thiel our go-to for who controls the guy who controls the media for one third of the planet, and now the data behind the surveillance apparatus of America?”

He’s far from alone in this concern. 

Should I Be Concerned About the ‘Meme Stock’ Thing?

Adding to the potential volatility of PLTR stock is the fact that it gets lumped in with the infamous meme stocks. Last week, PLTR was one of the top movers as Reddit investors talked it up. 

Bottom Line on PLTR Stock

The bottom line is that Palantir is a complicated pick as a long-term growth investment. Since going public, the company’s financials are trending in the right direction. Its services are clearly in demand, among government agencies despite its steeped controversy.

If public sentiment grows to the point of forcing regulator action against its data mining technology, that would spell trouble for Palantir. Especially with so much of its revenue coming from government contracts. Its meme stock status acts as an amplifier to good and bad news, introducing a little volatility to the mix.

If you’re looking for a long-term growth pick for your portfolio, PLTR stock has real potential. PLTR’s  growth projections could easily be de-railed should its name be dragged into public scandals involving any of its associated projects or its co-founders.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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