Like other high-flying growth names, Palantir (NYSE:PLTR) stock suffered a massive dip the last few weeks.

Most of the decline came after it announced earnings on Nov. 9. The results were pretty solid beating a lot of Wall Street estimates. So why the drop?

A lot of it has to do with the bearish sentiment surrounding high-growth names. Due to the fantastic run of growth stocks the past few years, analysts have begun getting skittish about valuation and growth projections.

PLTR stock is currently in a zone where it has found support in the past. The only question is will this support hold. That depends on the strength of the bearish case for the stock. Fortunately for investors of PLTR stock, I feel these fears are a little unfounded.

Unfounded Worry About Government Revenue Slowdown

Wall Street Analysts continue to sour on PLTR stock. The latest bank to cut its price target was RBC Capital. The stock’s rating was cut down from “sector perform” to “underperform” and its price target was slashed by 24%. PLTR stock immediately fell upon the downgrade by around 9.3%. The sharp sell-off triggered bearish momentum on the stock as it continued to drop to its current price level of approximately $18 to $19.

I typically view Wall Street sell-side analysts as a form of contrarian indicator. They typically group up and gang up on certain stocks that are out of favor. For instance, many of them downgrade a company in quick succession with few bucking the trend. Today it is the high-growth names that are getting the beating. However, these analysts typically don’t see the forest for the trees and focus too much on quarter-by-quarter results.

For example, one of the main reasons cited in the downgrade was the slowdown in the government sector. The RBC analyst mentioned that “the growth rate in the third quarter from the second quarter was cut almost in half.” However, most news releases fail to mention that government revenue overall increased 34% from a year ago.

This increase is still a fairly healthy one. It is true that there may have been some slowdown between Q2 and Q3 due to the winding down of Covid-related spending. But the long-term strength of the business is still intact. Palantir has a dominant market share for government-related data analytic contracts.

Palantir’s Momentum Continues

Palantir just announced that the U.S. Army exercised the second-year option of its partnership with the company. This option to continue using Palantir’s software to centralize and integrate the Army’s data is worth $116.3 million. The company also recently bagged a $43 million contract from the Space System command. The company’s Warp Core software is utilized to manage large volumes of data to defend against threats from the space domain.

I expect Palantir to continue winning government contracts as its momentum is undeniable. And while revenue from these types of contracts can be lumpy, I expect PLTR stock to benefit from these in the medium to long term.

Apart from the continued long-term strength of the company’s government business, the company’s commercial business is gaining steam as well. Palantir and Merck (NYSE:MRK) have announced a partnership to tackle the persistent problem of computer chip shortages.

The new platform is a collaboration tool called Athinia. In the past chip-makers are hesitant to share sensitive data such as chip yields for competitive reasons. However, addressing the current supply chain crisis requires close collaboration between industry participants.

Palantir’s platform would encrypt and anonymize this important data leading to better more efficient supply chains. If this takes off, I believe that this type of supply-chain product is applicable to a wide array of different industries.

Investor Takeaway on PLTR Stock

In my view, Palantir is one of those companies that is unrivaled in the space. The data and analytics industry will only grow in importance in the coming years.

This means that the company is here to stay for years to come. It makes sense, therefore, to consider accumulating PLTR stock at these levels.

On the date of publication, Joseph Nograles held a LONG position in PLTR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.