Investors in Palantir Technologies (NYSE:PLTR) are having a tough go of it lately. Shares of the big data firm are down around 30% in just over a month. And since hitting an all-time high of $45 in late January, PLTR stock is down 58%.

However, the earliest investors in Palantir are still sitting pretty. PLTR stock went public in September 2020 via a direct listing. Shares opened at $10, meaning they are up nearly 90% in the past 14 months. 

I happened to read a November article in Fortune about Palantir Technologies (NYSE:PLTR) discussing the data analytics’ company’s business model and its built-in conflict of interest. The article suggested some analysts are worried Palantir’s inclination to sell its services to special purpose acquisition companies (SPACs) it has invested in could hide the actual health of its core business.

Here’s my take on this hypothesis. 

My Take on Palantir’s SPAC Investments

Fortune spoke to a couple of analysts who explained some of the problems with Palantir’s potential conflict of interest. 

“In some ways, it feels a bit nefarious,” Citigroup senior equity research analyst Tyler Radke told Fortune. “They’re going out and making these investments, and then these small-scale companies going public through a SPAC — a lot of these don’t even have revenue — are turning around and using those proceeds to buy Palantir software.”

Another analyst mentioned in Fortune’s story, RBC Capital Markets’ Rishi Jaluria, wondered why Palantir was investing in these speculative de-SPAC companies that have gotten little traction to date. “If I want to put it less charitably, is Palantir buying revenue?” Jaluria said.

According to Palantir, only 2% of the revenue the company generated in the first nine months of the year came from these companies. The rest came from good old-fashioned sales calls. 

As I stated in my November article about Palantir, it could generate as much as $1.3 billion annually in free cash flow (FCF) by the end of 2025. With debt accounting for less than 1% of its market cap, these SPAC investments are hardly a big deal.

However, if one or two of them happen to pay off, PLTR shareholders get an extra benefit from the company’s risk-taking. So, I’m not concerned about Palantir’s side bets. If they’re investing in companies that could benefit from Palantir’s Foundry data analytics platform, I fail to see why both parties wouldn’t take advantage of the mutual association.

But don’t take my word for it. I would read the Fortune article and make up your own mind about whether Palantir is buying revenue. I don’t believe it is. 

Palantir Zigs When Others Zag

There is no question that Palantir marches to the beat of a different drummer. But that’s what intrigues me about the company. 

As I said in November, if Palantir keeps its eye on the prize — growing its Foundry and Gotham platforms — PLTR stock could deliver massive gains to shareholders.  

In May, I took issue with Palantir CEO Alex Karp’s billion-dollar compensation in 2020, writing: “No CEO, even a co-founder, deserves this kind of payday. And let’s not forget that Karp actually made $48.7 million in 2020 from 2.57 million shares exercised from previous option awards that vested during the year.”

That said, Karp will ultimately be evaluated by how much he makes shareholders and not how much he makes for himself. So, I’ve decided to put this issue aside. I hope it doesn’t come back to bite me in the posterior. 

The Bottom Line on PLTR Stock

By the end of my May article, I suggested investors wait until PLTR stock was trading in the teens before buying, preferably around $15 a share.

As I write this, PLTR is trading in the teens for only the second time in 2021. The first time was in May, around when I said its CEO was overpaid. Over the past 52 weeks, the lowest its shares have dipped is $17.06 on May 11. 

If you believe, as I do, that Palantir’s SPAC deals are an exciting sideline rather than a way to generate revenue, you would be wise to buy some shares should PLTR stock fall to between $15 and $17.06 over the next few months.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.