Transcription
All righty, so this is pretty big. Some would call this a conspiracy theory; some would call this putting the dots together on how Palantir is going to get much more involved in the government.
Okay, here's what Jack Prescott posted:
He said, "At this point, it's all but officially confirmed that Palantir will be helping with Doge." Doge is the Department of Government Efficiency. This is Elon Musk's project that's going to be going on.
In the past couple of weeks, Elon publicly calls Palantir CEO Alex K. Based. Elon posts a photo of him and Trump on the Jumbotron at the Army-Navy game, conveniently leaving Palantir's logo in the photo.
An account points out Palantir's logo in the replies, and Elon directly responds with an American flag. Elon pins a video of Peter Thiel to his profile. Peter Thiel is obviously involved in Palantir's founding.
Now, Elon is following Palantir on X. On top of that, the CTO is being recruited by the Department of Defense, and co-founder Joe Lonsdale is tweeting about Doge often.
Yeah, that one—I'm not surprised there. He goes on CNBC quite often and speaks on there as well.
Again, nothing is confirmed, but man, it seems obvious at this point. Otherwise, this is one heck of a coincidence. Buckle up, right?
I think that is what the market's pricing at. I think that's fair to assume Palantir is going to have a much bigger role in government efficiency.
But here's the thing: Palantir is already a huge player on the government side in the United States specifically. It's not like Palantir has no relation. If you go through basically almost all the branches of the military, Palantir is already heavily involved there. If you go through many other government agencies, Palantir is involved in a lot of them in the USA.
So it's not like there's not opportunity for expansion there. There is absolutely opportunity for expansion over the next many years.
With that being said, you have to understand the major growth for Palantir is likely not on the government side; it's likely on the commercial side. That's where we're seeing the big growth.
So the US government business should continue to grow bigger and stronger, but that's not even why I'm invested in the company. I'm not invested in the company because of the government business. I'm invested in Palantir because of the commercial side of the business.
I look at the commercial side of the business, and I'm like, that should dwarf the government side if we look out 10 years from now. It shouldn't even be in a close similar ballpark range.
Now, the moral of the story in regards to Palantir stock closing in on new all-time highs—close to 81 bucks—it's been an incredible run.
But here's the thing you have to understand about this stock price move: This stock price move will not be justified unless we continue to accelerate revenue growth throughout the entirety of 2025.
If we can continue to accelerate growth rates—right? The recent quarter was about 30% revenue growth. If we accelerate that to, let's say, 32-33% next quarter, and then 35-36%, then 38-39%, then 40-41% by the end of the year, we have a strong argument to be made here that the move has been justified in the stock.
However, if we kind of reach, let's say, up to like 32-33%, and then growth rates start falling again, this move was not justified, and we will come down substantially.
When I say substantially, I'm talking about going from $80-something a share down to like $50 a share. So, substantial downward move if that plays out.
But like I said, if the growth just keeps accelerating, next thing you know, we're posting 40% plus revenue growth. At some point in time, we'll look back and we'll be like, "Dang, man, yeah, the valuation was crazy. It looked like on surface level, but because the growth was so insane, as a Palantir shareholder..."
You know, I don't know. It's been really hard for me to see us getting to 40% plus growth. I have a lot of doubts about that. I feel like we can do 30% plus and sustain 30% plus.
So, meaning basically, I could see us being in the 30-35% range and sustaining that for several years. I can see us pulling that off, right?
And I say that's priced into the stock already at this point in time. What's not really pricing the stock is if we accelerate revenue growth to 40 or 50%. If we did that, all bets are off.
If we all of a sudden accelerated revenue growth to 40% and then 50% plus, could you see a $100 plus Palantir stock price? Yeah, you could. But don't automatically run to those conclusions, right?
This is a big mountain to climb here, right? So that's something to kind of keep in mind.
Now, let's go ahead and react to Alex Karp here, and I'll share my opinions and perspectives.
What do they call that? Is it called cross-country skiing, or is this called long hill skiing? Is it long hill skiing or cross-country skiing? If you know what Alex Karp is up to here...
I grew up in Phoenix, Arizona. We don't see snow in Phoenix. I've lived in Las Vegas, Nevada, for almost 10 years now. We don't see snow out here.
So, snow is not something I'm so familiar with and all that sort of stuff. So educate me in the comments section: Is this long hill skiing? Is this called cross-country skiing? What is this?
From everyone at Palantir, here’s a very, very, very Merry Christmas, Happy Hanukkah, and a truly wonderful New Year.
This has been an extraordinary year for Palantir and our supporters the world over. We got into the S&P, which is a sign of the juggernaut that our products created.
We made people understand that ontology is the power engine that makes LLMs actually useful on the battlefield and in the commercial arena. We are at the core of making the obvious superiority of the West not just a moral platitude but a factual reality in industry, especially in America, on the battlefield, both for America, most importantly as the leader of the free world, and for our most important allies.
We are grateful to the people who installed our product, helped us build our products, and have used our products, especially those that are in harm's way even as we speak.
Also, exceedingly grateful to all of you individual investors who took the time and opportunity and had the courage to look past conventional, rusty, crusty platitudes and look at our company as it is. Talk to our actual clients and people whose enterprises we are transforming, and put your own money at stake.
On this Christmas, all of us at Palantir are very, very grateful for the role we play in making the West stronger, better, and safeguarding its superiority as a force of good and something to be reckoned with, and on occasion feared.
Thank you.
So, Alex Karp there is very appreciative. I mean, he's come off of a great year, right?
Let me be very clear about my feelings around Alex Karp. I think he's a top-tier CEO in respect of being able to get talent at his company to work for the mission and get people really focused on the mission the company is trying to solve for and trying to accomplish, right?
It's absolutely incredible, and he's really built the sort of company that you could see being a massive player—not just on the government side, but on the commercial side as well.
One of the top names you really mention when you're thinking about, you know, if we want to put them into the SaaS category, right? You could put them in the SaaS category, whatever category you want to put Palantir into, but one of those sorts of software-related companies that you think of, you know, top player—you're going to think Palantir, right?
He's really positioned the company there, and I think he's done an absolutely incredible job pulling that off and getting the company through some dark days of 2022.
We know what it was in 2022: the revenue growth kept shrinking and kept shrinking, and there were a lot of question marks about what is Palantir's revenue growth in the future. Is it a 10% type company? Is it a 15%? There were a lot of questions.
I mean, revenue growth went all the way down to the 12% range at one point in time. That was bad—really bad for Palantir. People always thought of Palantir as a 30% plus revenue grower, right?
So to go down to 12% was just kind of shocking to a lot of folks, right? It was dark days. But, you know, I definitely saw an opportunity there in 2022. I thought they would get back to much bigger revenue growth.
I was kind of thinking, like, I think the company can get back to those 20-30% ranges long term, right? And they've been able to do that and accomplish that.
It's just they needed a product. The only thing Palantir really needed was a way to acquire customers in a much quicker fashion and get them to understand the value proposition of Palantir.
Them launching AIP boot camps was really the fundamental change in the business model because you took the sales cycle down from, you know, many times people used to talk about the sales cycle for Palantir being 6 to 12 months, which is just not feasible, down to hours or days where a customer could use Palantir and be like, "Dang, I'm getting value from this in a matter of, you know, a day."
That's a big change versus trying to be sold over many, many months.
So that was forever going to be, you know, when we think back to Palantir, a game changer. I think AIP boot camps will always be that game changer for the company, right? That was a fundamental change.
And obviously, we've seen what's happened with the revenue growth since then, and we're still in an acceleration cycle. We just don't know where the top is.
That's an important thing everyone watching this has to understand: We don't know where the top is for Palantir's revenue growth. Maybe it was this last quarter when they hit 30%. Maybe it's not for another year or two from now, and by that time, we're doing 40 or 50% or 60%.
We just don't know. That's the bottom line. We don't know where the top is for Palantir's revenue growth; we just know it's higher.
So that's fun, right?
In regards to Palantir, I'm now holding 3,333 shares of Palantir in the public account. You know, obviously, with Palantir continuing to go up, am I planning on cashing some more of these 3,333 shares? The answer to that is no.
The reason being is I've already taken my profits on Palantir. I already sold 2,222 shares, so I feel good now. I feel like I've de-risked. I've already taken huge profits on Palantir—like incredible gains, like ridiculous, right?
And I'm playing all with house money now, so I don't feel a need to rush out because I'm kind of wondering, "What if they do get to like 40 or 50% revenue growth?"
I'm like, if they do that and they could sustain that for many years, I'm like, we got a long way to roll here in regards to that, right?
So I'm just another person who's just kind of looking at this, and I'm like, "What if they do do it?"
I've already de-risked; I'm good now at this point in time. I feel comfortable. If I hadn't sold any, then I would be thinking, "I should cash something." But since I did, I feel good.
I've made a ton of money, now hold a ton of money, and if Palantir keeps going, next thing you know, it's a $100 plus stock. Hey, I'm going to be a happy camper.
Okay, hey, I want to thank you so much for watching that clip here today. I hope you really enjoyed that one.
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All right, Palantir. I mean, at one point, Nvidia had the throne of the best performer. Palantir has stolen that and then some.
I know we've pulled back slightly this week, but it's still a phenomenal name as far as its yearly chart.
Yeah, and some of that pullback, especially when you think about yesterday, had to do with just overall broad market action.
But today, Palantir is moving higher off the back of some news that it has expanded its contract with the Army. The new contracts could lead to up to $609 million in terms of the expansion of that contract.
It doesn't mean it necessarily would go that high, but it could be as much as that. So you're seeing the stock move higher by almost 5% today.
You're right; it has been a massive mover when you think about the trajectory of Palantir this year—up more than 300% year to date.
But that is one of the questions that analysts have around this: the valuation question, right? Because where does it go from here?
As you mentioned, UBS has initiated coverage of Palantir. They've initiated coverage with an $80 price target, but they are hitting it with a neutral rating.
They said, "Our review of Palantir fundamentals left us very positive. Customers and other checks were almost all bullish on Palantir's model, but the thing that is keeping it on the sidelines, as it were, is the stock's valuation."
They say Palantir's valuation is "simply tough to get over." We know that the defense sector is a big part of where Palantir gets its revenue from. It has been expanding within commercial, but again, defense has been its biggest money maker for Palantir, especially when you think about the AI platforms that it provides.
This is completely fair in my opinion in regards to UBS's note here: valuation at 40 times, 49 times revenue, and 124 times free cash flow in 2025 estimates—simply too tough to get over.
Fair. Like, as a Palantir shareholder, I agree. I can understand why somebody wouldn't buy Palantir right now. The valuation is very, very rich.
So, yeah, and that's why, as a Palantir shareholder, in my opinion, it makes sense to take some profits now or just hold your shares.
To be actively buying, you're just not getting attractive pricing right now on Palantir. That doesn't mean it can't go up more in the short term. I know it goes to $80 or $100 or whatever, but I'm just like, there's very limited juice to squeeze over the next, in my opinion, 2 to 3 years on Palantir.
I hope I'm wrong. I would love to see it at $150, send it to $200 bucks, but I'm like, eh.
Was its bread and butter? But again, it's been expanding, so it looks like UBS sees the bullish case. But it's, again, given what has happened this year and the momentum behind it, it has questions about the valuation reaching much more from here.
Yeah, Diane, I think I hear that argument. The only problem with it is that it was basically as expensive as it had ever been pre-action, and the stock's basically doubled since that point to get even more expensive.
So while the risks are very much highlighted by the valuation, it's really hard to time. So keep that in mind as well.
Other than that, it seems like this is a company kind of clicking on all cylinders. Is that your thought?
Yeah, I mean, that seems to be the case in terms of its performance, expanding this contract of, again, what has been their bread and butter.
But it's interesting to see the note from UBS because it does match up with some other recent analyst commentary. William Blair saw this contract coming—the extension of this contract—and seeing the value increasing.
But they also point out the premium that it trades at when you compare it to its peers. So they also have an underperform rating.
Well, they don't have a neutral rating; they have an underperform rating, and they say the potential for just that valuation—the multiple compression that we've seen in previous years, if you go back to 2021 or 2022—they talk about the risk to the upside.
Even the incoming administration, they point out there could be some risk there.
So to your point, Alex, although it did move higher, you know, along with some overall broad market action following the election, there is concern about, you know, what new contracts would be extended under a new administration.
Now, on the bullish side, you have analysts who do expect to see increased spending there with the new administration.
I think that's a great point there. I see this name. I mean, there's an expected benefit of more and more of this money pouring into the economy if you're a believer in that, that the new administration...
I think there's a lot riding on that, but we will have to wait and see.
I do think, unarguably so, Palantir is now the best performer in the S&P 500 this year. It's still one that's always going to warrant our attention despite maybe its super high valuation, which I think is a fact at this point.
But I appreciate, as always, the great breakdown from Diane King Hall, senior markets correspondent for the network.
Yeah, there's absolutely no shame in the game in taking some profits on Palantir, right? And redeploying that if you see better opportunities in the market.
Because Palantir at this stage, you know, it's just not even close to being the best opportunity in the market over the next two to three years.
I would call it a pretty high-risk, pretty low-reward opportunity for the next two to three years, in my opinion, right?
And the reason being is you just pushed the valuation so far. The two-year forward P/E is 100-something on this stock, right?
You could say even if earnings per share come in way better than anticipated, you're still at, let's say, 100, 110, 120. It's not like it's a low amount there, right?
And so there's a real potential they come in with 30% plus revenue growth in 2025, 30% plus again in 2026. But even then, you're still running a very rich valuation on this baby.
So yeah, Palantir, it's either, you know, sell some shares, cash some shares, redeploy that money elsewhere, or just hold.
And to buy here, like I said, there's just a lot better opportunities now. It's just very different than it was two years ago.
I think Palantir was one of the best opportunities in the market to be buying two years ago, like I was, right? But now, that ship has sailed.
That ship has sailed.
So yeah, hey, I want to thank you so much for watching that clip here today. I hope you really enjoyed that one.
What you're looking at right now is 1000xstocks.com. THX does not just show you a billion different metrics that are completely irrelevant. It's curated mandatory metrics—advanced metrics curated for long-term investors, not for traders.
So you can understand a company on the highest level possible, how it operates, and most importantly, make judgments on whether you want to invest capital into a company or not—understanding the upside, the downside with companies.
Is that company worth our investments, or shall we keep our hands away?
So how you can access THXstocks.com is you can go to the description area of this video, or you can go to 1000xstocks.com and apply for access to the service.