June 22nd, 2023 | 08:20 CEST
PayPal, Star Navigation Systems, Palantir - Fully on course
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"[...] In Canada, there is $1.75 of debt for every dollar of disposable income - and that was true even before the pandemic. [...]" Karim Nanji, CEO, Marble Financial
Palantir - Brightened chart picture
Without question, the forecasts of the largest developer of graphics processors and chipsets for personal computers, servers and game consoles has a positive pull on the whole industry. Thus Palantir could experience a revival after two relatively lean years on the stock market. Since the beginning of May, the share price of the data analysis company has performed by over 130% and is currently trading at USD 15.79, close to a prominent resistance level at the 2021 yearly low of USD 17.06. The price has already tested the mark once under high volume. Should a breakthrough succeed, the next hurdle to overcome would be the level around USD 20.55.
The already bulging order books were now further filled with three orders worth USD 110.5 million from the US Air Force. The US Air Force concluded a contract worth USD 58.5 million for an advanced Data-as-a-Service platform solution. This contract includes automated data integration from multiple sources across the Department of the Air Force, including personnel, equipment, planning, health and other readiness data sources. For the space domain in support of Space Command and Control and Mission Partner, a DaaS platform has been ordered for two separate mission domains. In addition, the North American Aerospace Defense Command/US Northern Command is having a data platform developed by Palantir that cost USD 19.2 million.
Star Navigation Systems - Unnoticed in the billion-dollar market
An AI company almost unnoticed on the stock market is Star Navigation Systems, listed in Germany and Canada with a market value of CAD 24.12 million. The Company provides solutions for inflight analysis, satellite communication and data processing for aerospace, including hardware and software. A patent application has already been filed for the product "The Digital Twin" in the US and Canada.
Star Navigation Systems' unique selling proposition is to perform in-flight edge computing and analyse the calculated data using artificial intelligence and advanced algorithms. This method enables real-time analysis of important parameters such as engine efficiency, aircraft structure or position data. The analysed data is then forwarded directly to the ground operators via satellite links. Thus, an aircraft can also be located outside the flight path.
A Letter of Intent for the procurement of the In-Flight Safety Monitoring System was recently signed with Caverton Helicopters, which intends to use it as a complete solution for its helicopter and aircraft fleet in the future. The Company owns a combined fleet of 30 helicopters and aircraft.
A significant upside for the Company, which has already been in business for 20 years, could also be in Africa. In addition to the aviation industry, the systems can also be used to track trucks, trains and ships. With the signing of a Letter of Intent with the Lapsset Corridor Development Authority, Star Navigation Systems has become part of East Africa's largest infrastructure project and is to provide the tracking and monitoring technology for the Lapsset Corridor Program, which is worth USD 30 billion. Applying a Subscription-as-a-Service model could mean recurring revenues of several 100 million USD in the future, according to management. In addition, sales of the hardware would increase enormously.
PayPal - Game-changer by selling debt package
The recently announced agreement, which has been commented on by both parties, could herald a trend reversal after months of decline in PayPal shares. Private equity firm KKR plans to purchase up to EUR 40 billion of PayPal's "Buy Now, Pay Later" loans in Europe. Upon completion of the transaction, PayPal expects to allocate approximately USD 1 billion for additional share repurchases in 2023, contributing to a new total of USD 5 billion in share repurchases this year.
In total, PayPal will receive the equivalent of around EUR 3 billion for the package, with EUR 1.8 billion to flow immediately. In addition to the liquidity boost, the US company also minimises the credit default risk, which has increased enormously due to the recession in Europe and the dwindling purchasing power. Following the announcement of the deal, PayPal shares continued their upward movement and are trading at USD 68.22, close to the downward trend at USD 71.46 established in August 2022. Should the trend be broken, a price gap at USD 75.52 would be next to close.
Artificial intelligence has entered the mainstream and is likely to gain further importance in the future. Besides Nvidia, Palantir and Star Navigation Systems are some primary beneficiaries. PayPal, meanwhile, is benefiting from the sale of its European debt package.
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