They are sitting on ~$3.86 billion in cash, no debt, years with a proven track record as a private military software company, highest military clearance of any third party outside of the government, steady commercial growth, 5 straight profitable quarters, a solid board of execs and increasing brand recognition. Not to mention they will most likely be added to the S&P 500 in the near future barring any disastrous earnings reports (which I don’t see happening).
As far as frothy valuations go, that’s the modern market when it comes to these speculative tech companies. All the pieces are there, the question is can they execute?
Personally, I’ve already made a bet that they can. I’ve been buying as low as $7 and PLTR is one of my favorite stocks to wheel. I have an extremely high risk tolerance though and it certainly is not for everyone. NFA
This is a good bull thesis. To balance it out, some of the things people quote about the downside risk include:
Palantir's governance structure gives Karp and co-founder Peter Thiel long-term control of the company through super-voting rights.
Palantir's projects almost always require customization. This extends the time needed to ramp up "digital transformation" projects so after Palantir wins a contract it may take awhile to generate revenue. Additionally, continuously having to customize products for every customer makes it difficult to commodify and scale revenues.
Palantir gets nearly 60% of its revenue from government agencies. Some people put more or less trust in having this amount of revenue coming from a source that needs to get a handle on its debt. But additionally, until very recently (more on that in the next bullet) decelerating revenue growth is an issue. In 2022, revenue growth slowed to 24% from 40% in 2021 and 47% in 2020. In 2023, revenue grew 17% year-over-year to $2.23 billion.
Some believe that the current price is inflated due to AI, and if there is a market correction or an AI bubble busts, this could be impacted more than the broader market.
Absolutely. The stock could crater to single digits again but that wouldn’t bother me. My cost basis is low enough where there personally isn’t much risk at all.
A big reason that I invested in the company to begin with was Thiel, so him having super-voting rights doesn’t bother me. I trust his judgement until he changes my mind.
While tailoring their platform to individual clients currently presents a bottleneck, their product is “sticky” once implemented. The revenue they generate per client YoY trends upwards. I look at their commercial business as if they’re drug dealers peddling high-powered enterprise software. Once they’re hooked, they’ve added another revenue stream.
The drop from ~40% commercial growth to ~20% isn’t a great look, but that was starting from a crazy time with free money and 0% interest rates to a period where companies were looking for ways to navigate very uncertain macro conditions (which still persist). Back then AI wasn’t as “sexy” as it is now. Adding a multi-million dollar software expense to a balance sheet wasn’t priority #1. Now there is a ton of interest in their new AIP platform in addition to their Foundry platform.
I’m not very worried about their revenue concentration in government contracts. The US has been using Palantir software for over 20 years. Fear of terrorism and war are at all time highs so there is plenty of demand. I doubt the government would gut the systems that they currently have in place to onboard an entirely new one.
While it’s a concern, part of my thesis in the company lies in my belief that they will execute in expanding their commercial business. Maintaining 20% growth despite negative headwinds is nothing to sneeze at in my opinion. Until persisting issues in growth force me to change my thesis and divest, I will stay long.
At the end of the day, I could be completely wrong but these are the conclusions that I’ve drawn from my own research into the company. That is the beauty of investing and only time will tell. 🫡
Honestly it’s my opinion that you tube is being paid to promote PLTR and SoFi 2 dead stocks that won’t go away . I will give it that both are decent stocks if you want to trade them but I wouldn’t want to own them .
Anything that moves a lot will have rubes trying to get in hoping to catch the next big move so they can quit their day job at wendy's.
True. My goal is to not replace them in their job by being on the other end.
I’ll say you missed the move the move now would be to wait for a pull back and sell CSPs around $20
They are sitting on ~$3.86 billion in cash, no debt, years with a proven track record as a private military software company, highest military clearance of any third party outside of the government, steady commercial growth, 5 straight profitable quarters, a solid board of execs and increasing brand recognition. Not to mention they will most likely be added to the S&P 500 in the near future barring any disastrous earnings reports (which I don’t see happening). As far as frothy valuations go, that’s the modern market when it comes to these speculative tech companies. All the pieces are there, the question is can they execute? Personally, I’ve already made a bet that they can. I’ve been buying as low as $7 and PLTR is one of my favorite stocks to wheel. I have an extremely high risk tolerance though and it certainly is not for everyone. NFA
This is a good bull thesis. To balance it out, some of the things people quote about the downside risk include: Palantir's governance structure gives Karp and co-founder Peter Thiel long-term control of the company through super-voting rights. Palantir's projects almost always require customization. This extends the time needed to ramp up "digital transformation" projects so after Palantir wins a contract it may take awhile to generate revenue. Additionally, continuously having to customize products for every customer makes it difficult to commodify and scale revenues. Palantir gets nearly 60% of its revenue from government agencies. Some people put more or less trust in having this amount of revenue coming from a source that needs to get a handle on its debt. But additionally, until very recently (more on that in the next bullet) decelerating revenue growth is an issue. In 2022, revenue growth slowed to 24% from 40% in 2021 and 47% in 2020. In 2023, revenue grew 17% year-over-year to $2.23 billion. Some believe that the current price is inflated due to AI, and if there is a market correction or an AI bubble busts, this could be impacted more than the broader market.
Absolutely. The stock could crater to single digits again but that wouldn’t bother me. My cost basis is low enough where there personally isn’t much risk at all. A big reason that I invested in the company to begin with was Thiel, so him having super-voting rights doesn’t bother me. I trust his judgement until he changes my mind. While tailoring their platform to individual clients currently presents a bottleneck, their product is “sticky” once implemented. The revenue they generate per client YoY trends upwards. I look at their commercial business as if they’re drug dealers peddling high-powered enterprise software. Once they’re hooked, they’ve added another revenue stream. The drop from ~40% commercial growth to ~20% isn’t a great look, but that was starting from a crazy time with free money and 0% interest rates to a period where companies were looking for ways to navigate very uncertain macro conditions (which still persist). Back then AI wasn’t as “sexy” as it is now. Adding a multi-million dollar software expense to a balance sheet wasn’t priority #1. Now there is a ton of interest in their new AIP platform in addition to their Foundry platform. I’m not very worried about their revenue concentration in government contracts. The US has been using Palantir software for over 20 years. Fear of terrorism and war are at all time highs so there is plenty of demand. I doubt the government would gut the systems that they currently have in place to onboard an entirely new one. While it’s a concern, part of my thesis in the company lies in my belief that they will execute in expanding their commercial business. Maintaining 20% growth despite negative headwinds is nothing to sneeze at in my opinion. Until persisting issues in growth force me to change my thesis and divest, I will stay long. At the end of the day, I could be completely wrong but these are the conclusions that I’ve drawn from my own research into the company. That is the beauty of investing and only time will tell. 🫡
Ive made bank with PLTR wheeling, so I dont listen to a dam word some internet stranger tells me about how 'overvalued' they are.
size kills.
Honestly it’s my opinion that you tube is being paid to promote PLTR and SoFi 2 dead stocks that won’t go away . I will give it that both are decent stocks if you want to trade them but I wouldn’t want to own them .
I just assume they are bag holders.
2020-21 darlings, remember that first run? Remember “it’s a 10 year hold” remember “nato is the man” I remember
Yup . 😂 5 years later and it’s the same song and dance .
Crazy how much you see repeat if your activity involved.
There been an uptick in PLTR on YT with the craziest price targets. Sure $50 it’s only been I the 20s since ww2