Palantir has pumped over $400 million into SPACs and boosted its revenues at the same time. It’s a throwback to the dotcom era, and Wall Street is worried.

In 2021, the Colorado-based big-data company agreed to pour $405.5 million into nearly two dozen special purpose acquisition company (SPAC) targets, according to investment bank RBC Capital Markets. Among the investments are robotics company Sarcos; biotechnology company Celularity; and biopharmaceutical company Roivant Sciences. Each offers a chance for Palantir to get in on the ground floor of what could be the next IBM or Tesla. 

But right alongside those investments, Palantir has brought on the companies as customers. The contract sizes of the deals for those companies have been larger than Palantir’s investment in the companies themselves, according to prior reporting by Newcomer. In two other agreements—one with satellite image company BlackSky, and one with online grocery delivery company Boxed—the contract fees match up exactly with the size of Palantir’s investments, according to filings viewed by Fortune. 

In February, for example, BlackSky struck a deal to go public through a SPAC merger with Osprey Technology Acquisition Corp. Before the deal closed, BlackSky entered into a $16 million strategic partnership with Palantir that included an $8 million investment from Palantir into BlackSky, according to a securities filing. Alongside the investment, Palantir and BlackSky struck a separate software agreement under which the satellite company agreed to pay Palantir fees that totaled $8 million.

The arrangements harken back to the dotcom bubble, when companies relied on the practice of buying software and services from one another to generate more impressive-looking growth numbers. The strategy was referred to as “Barney deals,” by one company, premised on the same principle that the children’s character sings about: I love you, you love me.

Two analysts who closely follow Palantir told Fortune that they are worried the business-boosting tactic is not creating sustainable revenue. They noted the agreements were already turbocharging Palantir’s sales growth in a way that could obfuscate how well the core business is really performing.

“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.”

Palantir, founded in 2004, has never done things like the rest of corporate America. Known for its secretive nature, the company has built its business primarily by working with the U.S. government, leading it to have just a couple hundred customers compared with the thousands that more traditional Big Tech giants boast, according to its latest quarterly filing. It went public in 2020 through a direct listing. Last August, the company began buying gold bars in case of a “black swan event.” 

So in some ways, Palantir’s push to invest in SPACs—which have largely come in the form of private investments in public equities, or PIPEs—seems very much in character.

The company has framed its SPAC investments as a bet on the future, putting money into industries where it sees upside and where there is also potential upside for Palantir’s software and services. 

COO Shyam Sankar previously told Barron’s that SPACs represented a “historic opportunity to invest in our customers.”

Not all analysts are concerned. Following the release of Palantir’s latest earnings report, Morningstar’s Mark Cash raised its price target on the company’s stock from $28 to $31 per share, citing an “increased conviction in the company’s strong growth prospects, even while amassing scale.”

But SPACs can be unpredictable. And therein lies the potential problem.

For RBC Capital Markets analyst Rishi Jaluria, Palantir’s SPAC activity makes him uneasy. Many of the companies it is investing in are young and in speculative businesses where there is no guarantee they will find success. 

“At a certain point, you have to ask, ‘Why?’” Jaluria said of Palantir’s decision to pursue SPAC investments. “If I want to put it less charitably, is Palantir buying revenue?”

In a statement to Fortune, Palantir pointed out that of the $1.11 billion of revenue that the company has brought in during the first three quarters of the year, only 2% came from the strategic investment programs. 

So far, the SPAC investment partnerships have seemed to pay off for Palantir. The company’s commercial revenues grew by 37% year over year in the third quarter of 2021, which in turn helped drive its total revenues 35.5% higher to $392.1 million for those three months, according to its latest earnings report. By comparison, Palantir’s commercial revenues in the second quarter grew 28%.

However, in a Nov. 10 report, Citigroup’s Radke wrote that, without the help of the revenues from its SPAC investments, the company would have only posted year-over-year commercial revenue growth of about 22% in the third quarter, compared with 25% in the second quarter—suggesting that its commercial business had actually slowed.

And in the ever-expanding technology sector, a company’s growth rate is critical for investors to be able to justify the stock’s lofty multiple. Palantir currently trades around $20, a multiple of about 30 times its total revenues over the past 12 months, according to S&P Global Market Intelligence data, at around $22 a share. Radke has a one-year price target on the stock of $18 per share, a significant gap.

“This definitely is a warning sign for institutional investors,” Radke says.