Palantir CEO Alex Karp says tidal wave of macroeconomic risks will wipe out some companies

Alex Karp, CEO of Palantir, arrives to discuss ethics for tech giants ahead of the “Tech for Good” meeting at Hotel Marigny on May 15, 2019 in Paris.

Bertrand Quay | AFP | Good pictures

Palandir Co-founder and CEO Alex Karp believes a period of “deadly” macroeconomic uncertainty will crush many companies on shaky fundamentals.

“Bad times are incredibly good for bananas…bad times really reveal companies that last, and technology goes through bad times…interest rates are the reason,” Corp said on CNBC Thursday. “Squawk Box.” “Will this deadly tidal wave wipe out some companies? Yes it will.”

Federal Reserve on Wednesday Raised key interest rates By three quarters of a percentage point in the 3%-3.25% range, the highest since early 2008. The Bank of England, Swiss National BankAnd central banks in Norway, the Philippines, South Africa, Taiwan, Vietnam and Indonesia followed suit, raising rates over the past year to tame spiraling inflation.

Palantir is a developer of data analytics software It went public through a live listing in September 2020 after nearly two decades as a private company. The stock is down nearly 60% this year.

Karp said only quality companies that produce durable products will survive the tough times.

“You’re going to see that the durable companies that come out of this in three, four years … are mostly from the U.S., mostly from the West Coast, and they’re going to focus on producing really important products,” Karp said.

The risk of a recession in the US was high as the central bank vowed to tackle inflation with aggressive rate hikes. The central bank has dialed back its economic forecasts, predicting high unemployment and very slow GDP growth.

Karp believes the situation overseas is even worse.

“People are afraid of energy outside of the United States,” Karp said. “They are so afraid of macro-political conditions that nobody wants to talk about them. Their institutions are built for a stable and integrated peaceful world. I think the balance sheets are largely unprepared for what’s going to happen. The next couple of years will be very bad politically and economically.”

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