Transcription
So what do you do with Palantir right now? Do you buy, do you sell, or do you hold the stock? Well, here's what I did today. What I personally did today is I cashed some shares; I took some chips off the table. So I've held 5,555 shares of Palantir, and I took like 555 shares off of my position. That was about a week ago, two weeks ago or so. Then just a little bit ago, I took another 550-something shares off, so now I'm down to like 4,444 shares in regards to Palantir.
Now, the reason I did that is I've now taken more profits in Palantir in the public account than the entire amount I invested in Palantir, which means I am playing now with what you would call house money. Every dollar I have in Palantir stock now in the public account is all house money because I've already taken out all of my principal plus some extra profit there as well. Right? So now, at this point in time, where Palantir goes over this next 5 to 10 years, it's all great. I literally have nothing invested in the stock in terms of what I actually put in because I've already taken that initial $49,000 out of the stock.
This is where investing starts to get really, really fun because I still have a position that's worth several hundred here, but technically none of that money I even put in. It's absolutely the most beautiful thing right now. The reason I went ahead and did that today has to go back to kind of, you know, valuations and how stretched the stock has gotten, and I'll run you through projections in just a moment here. Right? If the stock does run to $75 plus, I'm going to take a little more shares off the table as well, just a small amount though, if it goes to 75 plus here before the end of the year essentially.
Right? But obviously, it's been just a terrific money maker in regards to Palantir stock. What an incredible, incredible situation. Now, this news came out here today: Palantir gets FedRAMP High authorization. Grant Pener said that it has been granted FedRAMP High authorization for two of its cloud-based services. The grant is for Palantir Federal Cloud Service and Palantir Federal Cloud supporting services. The authorizations cover the entirety of Palantir's product offerings and programs. The Palantir Federal Cloud Service is a cloud-hosted offering developed for the purpose of delivering Palantir software, while the Palantir Federal Cloud supporting services is a cloud-hosted environment that delivers commercial software to federal government customers as a more secure cloud service at the FedRAMP High baseline.
So, you know, just Palantir executing as you would expect them to execute. The company's been executing on an extremely high level the last couple of years here, and they just continue to do so. Right? So Palantir doing Palantir stuff, executing very, very well, running this business model like a champ right now. Additionally, obviously, they're now in the NASDAQ, right? You've got the whole NASDAQ 100 situation, so the forced buying there on top of the S&P 500 inclusion that happened a few months ago.
So we just have a lot of positive momentum just going on with growth that's just been accelerating, accelerating, accelerating here. Now, with that being said, let me run you through some projections and let me show you how difficult it's going to be for Pener to get any substantial gains over the next few years. So running projections here in Palantir, if you want to think about how you can make money in the stock over the next few years, here's how you make money in the stock over the next few years: we need to accelerate the growth rate to 35%. Pener has accelerated it recently to 30%, so 35% is possible. It's difficult, but it's possible.
But not only do we have to get to 35%, but we need to keep 35% revenue growth per year for the next, like, four years. Okay? So it's one thing to get us up to 35%, which is another acceleration from here, but it's another thing to keep that going year after year after year for several years. It's possible, but it's going to be difficult. Right? Now, additionally, we have to have net income far outpace the revenue growth, so we're going to have to have the company doing like a 45% clip for net income growth, which is, once again, it's possible, but it's very difficult.
So that's just what everybody's got to understand about this game. If you slap a 100 to 120 P/E ratio on Palantir stock, then you can at least get a decent ROI through 2028. Right? But it's just decent. And so the moral of the story in regards to Palantir stock is can you make money in the stock over the next three, four, five years? The answer to that is yes, that's possible. But the thing you have to understand is the big if.
If anybody's investing in the stock thinking they're going to make life-changing money, game-changing money like we made over the last couple of years, and they think they're going to do that over the next couple of years, I have news for you: that's very unrealistic. If you think you're going to make that life-changing money that we've made over this past two years over the next two years, it's extremely low probability. And when I say extremely low probability, I'm talking like 1% or less than 1% probability. That's how low I'm talking.
Can you still make money over the next two years? You know, it's going to be difficult. I'm going to be completely honest with you guys; it's going to be very difficult. When you run these numbers and you run these projections, it's going to be very difficult to make any substantial money over the next two years, three years out, four years out. Okay, maybe we can talk a little bit more about that being a potential money-making opportunity five years out, okay? Six years out, seven years out, okay? We can talk about that.
But, you know, if anybody's investing in the stock now and they think they're going to make life-changing money over this next couple of years, that ship has sailed. You're way late to the game. It doesn't mean you can't make money in the short term, as in the next few weeks. There's certainly a potential to make some more money in this stock. Right? You've got, obviously, the Santa Claus rally going on; you have a lot of positive momentum in the NASDAQ 100, you know, continued forced buying there. So you have some more positive momentum.
So if you're trying to think about it from a very, very short-term perspective, like there might be some more juice to squeeze here, but it's just going to get very difficult from here now at this point in time. So that's just what everybody's got to understand here about Palantir stock. And so for me, you might say, why don't I just sell all my shares if I think it's going to be tough sledding the next few years?
There's a potential—what if revenue growth goes to like 4% plus and net income growth goes to like 50% plus? Right? I mean, the growth rates have been accelerating, accelerating. Who's to say that doesn't happen? So I want to see this story play out. I've already taken all my chips off the table; I'm just playing all with house money now. And now I'm just like, let me see what these cards are looking like here because there's a potential like we accelerate even further. And if we do that, right, there's still some money to be made here.
So that's where I'm at in regards to this one, but it's getting into that difficult territory. We're getting into that stage of Tesla late 2020 into early 2021 where you're up there, you're at, you know, insanely high valuations, and it's like, geez, we have priced in a lot now. To get this stock to continue to move, it's going to be a hell of a challenge. It's going to be a hell of a challenge—not impossible, but it's going to be really, really difficult.
And we're starting—we've basically stolen so many catalysts from the future. The NASDAQ 100, we've stolen that from the future, right? That's already played out. Now you're not going to have another one of those S&P 500 inclusions; we already stole that. You're not going to have another one of those. Right? If we want to think about the revenue growth acceleration cycle, we've already pulled that forward now at this point in time. Right? We can hope to continue to see some revenue acceleration here, but it's just like it's getting more and more difficult.
So we've pulled a lot from the future to now essentially in regards to stock price. So, yeah, it's what happens with the stock. I think it's one last point I'll make here in regards to Palantir to kind of leave some closure in regards to the situation. When you have a company in which the business model has been completely transformed, when you have a stock that basically everybody forgot about, right, and they threw it in the garbage can and no one cared about it, and then in over a two-year span, they have a fundamental change in their business model, right?
And additionally, that's obviously AI—a fundamental change in the business model and all the excitement around AI, right? And Palantir just being so well positioned for that. You essentially go through this kind of major growth cycle in regards to a stock. What ends up happening is it basically happens every single time: people just price in too much in the future. And the reason being is you just have the people that were buying the stock back in the days when it was tough. There are a lot of very strong hands; they're what you would call diamond hands. It's very difficult to get those individuals to sell the stock.
But meanwhile, you have all these people that weren't onto the game catching up to the game late, right? And they just pile on insane amounts of momentum in regards to stock. And that's why you get these just unbelievable stock price moves. This is how we make so much money. Like, this is how we make so much money when you have these sorts of situations where, you know, the stock was forgotten; it was a $6, $7 stock a couple of years ago, right? And now people are happy to pay $70 plus for it.
So it's what happens in the stock market; it happens all the time. Now, you could also say, what happens if the stock even gets more crazy valued, right? It goes to $100 plus. That's always a potential as well, right? But the further Palantir goes from here up in the short term, as in the next 6 to 12 months, the more risk there is for an actual epic crash in regards to this. As of right now, I don't know if I see an epic crash in regards to Palantir. I see maybe like a downtrend, an extended chill-out time period for the stock.
If the stock gets extended more short term from here, and I mean substantially more, then you could talk about maybe setting up for a crash. But Palantir is still not at a stage where I would feel comfortable buying put options on it. I would not feel comfortable buying put options on Palantir yet. You know, I think it's taking a big risk because if this growth keeps accelerating—let's say next quarter they hit 33% revenue growth or 34%, and let's say the next quarter all of a sudden they get like 36% to 37%, then the next quarter they're at like 40%—woo! Good luck with your put options if that plays out.
And so basically, if you're thinking about put options in regards to Palantir, you better get your timing perfect. And I think that's going to be very, very difficult because the perfect timing will be right when the growth stops accelerating. But that still might be one quarter to three quarters away, maybe four quarters away. And so to get that timing perfect, ooh, that's going to be a difficult game.
So, but right now, it's got all the momentum in the world, right? And as a long-term investor, I look out there and I just say, hey, this is a pretty attractively priced stock for me to cash out some shares. So, we'll see how it all plays out, but I'm a very, very happy camper.
Geez, like, and congrats to everybody in the Palantir community! Like, woo! I mean, what fun has it been? What fun has it been? But let's do one last thing in regards to Palantir before we wrap this up and get onto these videos. Let's just say hypothetically Palantir growth accelerates to that 40% number, right? Let's say they go there, which is difficult, but let's just say they do it and they sustain a 40% growth level.
And let's say they get up to 50% net income growth here, which is like a whole other level in regards to net income growth. And then let's say we take the P/E to 120 to 140, let's say, and let's see what we've got here. So 120, and then we're going to do 140 on these bottoms, and we're going to see what the compound annual growth rates will look like here if we run this scenario.
So in this scenario, you know, Palantir could still be a 20% plus CAGR over the next four years if—but once again, guys, I mean, that's going to be crazy difficult. It's not impossible, but I'm just telling you that that right there I would say is would be an ultra bull case for Palantir for them to get to 40% revenue growth and continue that for four years and do 50% net income growth a year and then command that 120 to 140 P/E ratio. That would give you a 20% plus CAGR over the next four years—possible but very difficult.
Man, that's like an ultra bull case there. Now let me show you kind of a bearish case because I think that's worth seeing. So let's say they accelerate growth up to 35% next year, but then let's say it decelerates a little bit down to 32%, then like 29%, then like 27%. Right? So let's say we have 45% net income growth next year, and it goes down to like 42%, then let's say we go down to like 37% here and down to like 33% here.
Right? So you might be willing to command a 120 to 140 here, maybe even still to here, but then because your growth is decelerating, people might be willing to pay a lot less. Right? So they might be willing to pay like, let's call it 100 to 120 here, and then you're down to 27%, 33%. They might be willing to pay like an 85 to a 95 P/E ratio if the growth keeps decelerating like that. Right?
And so in that scenario, that's tough, man. That's tough. Compounding annual growth rate for the next four years in the single-digit percentage. Right? And by the way, those would be very good numbers for Palantir. It's not like those are like, wow, that's embarrassing, like what a disaster. No, like that's still good numbers. Remember, the company's been accelerating revenue growth quarter after quarter for quite a while now.
So they would have to continue to accelerate all the way to 35%, then it goes down to 32%, then 29% in 2027. It's not like these are bad numbers; this is still a win for Palantir. Like, if Palantir does these numbers I have here, like this is still a win. But the stock price is priced in so much that the returns would suck for the next four years. And so once again, that's the risk here.
Okay, hey, it's Jeremy. I hope you really enjoyed that clip here today. What you're looking at in front of you right there, that's the six-figure Hall of Fame. Do you want to see the next one? That's the seven-figure Hall of Fame. Now, that is my private group. Those are members of my private group that have scaled to six figures, multi-six figures, seven figures, multi-seven figures in their stock market portfolio.
They say you are the average of the five people you associate with. If you're somebody that is having trouble finding other long-term investors that are focused on building their wealth over the coming years, finding like-minded folks, look no further than my private group. We got a tremendous amount of people; we're consistently talking with each other, learning from each other, researching companies together, sharing news about our different companies. Right? We do all that inside my private group.
If you would like to apply to join us in there, go down in the description area. There'll be an application down there; you can click on that, and you can apply to join us in there and take your game up to a much higher level and associate with the type of folks that you actually want to associate with.
Sofi Technology. Sofi Technology is a $15 stock. The stock's up about 63% year to date. Now, Sofi is now my sixth position in the public account. That's an active position that is up over 100%. Very exciting! It's a long way from Tesla's 2,500% to 1,695%, but it's getting there. Right? And so, sixth position for me to be over 100%, and I have no interest in selling any of my shares, honestly, in the public account at all.
You going to understand Sofi? So, Sofi, the way I would look at it is it's in the cross-section of fintech and new-age banking. And so fintech is because of their Galileo platform. Also, they do a phenomenal job of kind of being a middleman, taking fees. Basically, they can kind of be a middleman. Like, let's say somebody comes to Sofi for a loan, but Sofi doesn't want to actually take on the risk of that loan; they might be able to sell that off to somebody else, right? Take a fee off of that.
There are so many incredible opportunities Sofi has overall that would basically put them in a position of being more of a fintech company and taking fees rather than worrying about taking banking risk. Okay? So that's something to keep in mind in regards to the fintech side of Sofi. Then additionally, they're really a new-age bank because they have no locations. Right? They're a digital-first company. They really, really resonate with the younger generations—Gen Z, the millennial generation. Right? I think they're going to do tremendous in Gen Alpha. I think they're going to be the number one best-positioned bank to attract Gen Alpha over time.
So Sofi is in a sweet spot. I mean, really a sweet spot in regards to this company, and a lot of it has to do with this man that's led the company for the last, you know, probably what, six, seven years now—Anthony Noto. Anthony Noto got brought over, you know, was it a couple of years before Rona? Right? And then obviously, through somebody like Sofi, for a loop, it was a whole situation to go through. Right? There was a student loan pause that caused a lot of harm to the company short-term. Then there was inflation; there was obviously interest rates changed dramatically. There was just a mess of a lot of different things all at one time.
Right? But Anthony Noto has led the company through all of that mess and out to the other side, which has been incredible. Now, the additional thing I really respect about Anthony Noto is not just that he's done a heck of a job running the company, right, and getting the company to this place and getting the numbers to this place, right, and getting them through the storm, but it's something like this. I don't know if you guys remember this. This is just over a year ago, back in November of 2023. News came out: Anthony Noto makes a $300,000 stock purchase. The CFO also bought shares, and the stock was in the sixes at that time.
Right? And the man's not afraid to put the money where the mouth is. Basically, when you see a CEO like Anthony Noto buying stock, he's basically saying that this stock is stupidly priced for—because you got to understand, especially CEOs and CFOs, they usually get granted so many stock options that for the most part, it just doesn't make sense for them to buy their own stock, like just straight up, like, "Let me just buy shares" unless it's at such a stupid price that they're like, "This doesn't make any sense if I don't make this move."
Right? And so I appreciate that. Like, Anthony Noto was basically giving us a signal right there of like, "Guys, this stock is like ridiculously priced. I'm going to put in a few hundred right now." Right? So that was that. Now, legendary! Legendary! Look at Sofi's revenue. I mean, is that not a perfect stair step there? If that's not legendary, I don't know what is! Incredible!
This is very important: what has transpired very recently with this company. Look at this. This is what I call the flip. The flip happened, folks. The flip is when a company goes from a massive money loser to start losing a little bit of money and then makes a profit. That's what happened in regards to Sofi. They pulled off the flip, and now the fun begins because now we're no longer talking about how much money is Sofi going to lose; now we're talking about how much money is Sofi going to make? What are the earnings per share going to be? Positive next quarter? What's their net income going to be next quarter? Not what their net loss is going to be next quarter; what's their net income going to be? And that's a game changer for Sofi forever.
Now, additionally, you look at Sofi; it's around a $16 billion market cap or so. But you look at it versus like big traditional banks. I mean, those big guys are at hundreds of billions of dollars market cap. Look at JP Morgan Chase: $700 billion market cap roughly. I look at Sofi, and I think the way Anthony Noto's positioned this company, this brand, the tech side of the business, and everything, I honestly think he's positioned it so this can become the next major banking giant, the next financial giant.
And I think that's going to play out over this next 10 to 20 years. And so I think Sofi has the ability to grow from this little guy company of like a $10 billion market cap, $15 billion market cap, into a company that eventually will see being a $100 billion market cap, $150 billion market cap, or dare I say several hundred billion dollars in market cap if we look out 10 to 15 years from now. And so that's an incredible opportunity there because you really haven't seen anything that exciting in the banking space for honestly really like generations. It's been such a long time since you've really seen an incredible opportunity in the banking space, in the financial space, and this is one of those very few opportunities.
And so Sofi is definitely a game changer. Now, there's a great book. You know, one of my favorite books I've read in the past few years was this book called "Mastering the Market Cycle" by Howard Marks. And in that book, Howard Marks goes into the market cycle cycles, right? The ups and downs of those market cycles, right? And how to identify them and all those sorts of things, right? And identifying companies that make it through to the other side, all that stuff, right?
And in the banking space, you got to understand it's a lot about market cycles. So in the banking space, it's all about when times are good, making as much money as you possibly can. When times are bad, make it through and don't get in a weakened position because that makes you stronger than your competitors. If you can do that time after time as you go through recessions and whatnot, you grow stronger and stronger and stronger into the next cycle.
If you want to know how JP Morgan became a $700 billion market cap Goliath company, they did that because they made it through so many various storms. They acquired a lot of companies over time, and they did absolute magic. So for Sofi, it's very important that they get through the next recession; they don't go belly up. And I don't believe they will because Anthony Noto is positioning this company where they're not going to take insane levels of risk. He makes sure he really, really, really keeps a close eye on leverage ratios in regards to the company.
You got to understand Anthony Noto used to work, you know, pretty high up actually at Goldman Sachs many, many, many years ago, and so he's got a lot of that investment banking experience that really understands this game on a high, high level. So the moral of the story is I like Sofi. I like Sofi a lot, and I think they have a chance to become a giant in the financial space. I also believe this might be the next Palantir.
So Palantir is now stock up 79%. Unbelievable, right? But Palantir for a long time was very misunderstood, and that's why the stock went under $10 a share back in 2022. Right? Very misunderstood stock. It's still actually a misunderstood stock. I heard somebody call Palantir a cybersecurity company recently, which was a very interesting way to describe Palantir. Okay? So misunderstood to understood, right? And it's definitely something we could see be playing out in regards to Sofi over this next bit of time where people start to get it. They start to really understand this is not just some, I don't know, play on student loans or whatever they think in their brains at this point in time in regards to Sofi.
So, yeah, pretty extraordinary opportunity. I really like that one. Okay, hey, it's Jeremy. I hope you really enjoyed that clip here today. What you're looking at in front of you right there, that's the six-figure Hall of Fame. Do you want to see the next one? That's the seven-figure Hall of Fame. Now, that is my private group. Those are members of my private group that have scaled to six figures, multi-six figures, seven figures, multi-seven figures in their stock market portfolio.
They say you are the average of the five people you associate with. If you're somebody that is having trouble finding other long-term investors that are focused on building their wealth over the coming years, finding like-minded folks, look no further than my private group. We got a tremendous amount of people; we're consistently talking with each other, learning from each other, researching companies together, sharing news about our different companies. Right? We do all that inside my private group.
If you would like to apply to join us in there, go down in the description area. There'll be an application down there; you can click on that, and you can apply to join us in there and take your game up to a much higher level and associate with the type of folks that you actually want to associate with.
Let's talk Amazon, Apple, and Amazon. Let's start off talking about those. You know, it's funny, Barton, I'm reading some of your notes about Amazon, the ramping investment in Anthropic that might help the optics, giving them a big LLM to run on their services. Empty calories, you say, though self-funded revenue lift. You also go on to say that there's some various weakness there as well. So I guess you don't sound like a man who loves Amazon even though you have a buy on it.
You know, I have a buy on it. The stock has done, you know, decently, and, you know, it's a large company with its arms in a lot of places, and I think on balance, you should own Amazon. I do think that AWS has not really been accelerated by AI, but that could happen. Probably will happen. They have them—that's a 2025, 2026, 2027, 2028, 2029, 2030 story—losing share in AI, I think, to Azure and to Google. But I think that that can improve as they improve their capabilities.
The biggest kind of support for Amazon right now has been this tremendous margin story. So it's almost like whatever happens on the top line, the margins have been so strong that it's an incredibly powerful element to that story, and that almost outweighs the rest of it. Yeah. I mean, the reason we think of Amazon, at least at this time, is of course because of e-commerce. Does it even matter anymore? Does this holiday period still move the needle for Amazon, and is it of importance?
You know, it's very interesting. Amazon has, we believe, decelerated to a place in e-commerce of growth basically in line with industry averages. You know, the fastest growth in e-commerce from a scale player would be Walmart right now, and Amazon's not growing as fast as Walmart right now. So, you know, at one level, that could be concerning, but the margin expansion has been so powerful that it's hard to really worry too much about that. And e-commerce is still outgrowing, you know, by a few percentage points overall commerce, so it's still a growth story.
And then you have these new elements factored in on top of that with advertising, you know, right at the forefront. So that's enough, we think, to keep Amazon interesting and to make it a stock one that you want to own on a relative basis at this moment. What about Apple as a holiday shopping? Oh, come on, come on! So I just ran some projections here on Amazon that I think are pretty fair. Next year, or, you know, 2025, I think revenue growth will be about 14%, roughly. I don't think that's a crazy number at all.
Net income growth, I have them doing around 25% net income growth in 202. Then after that, I have them doing on average 12% revenue growth per year and 20% net income growth. The bottom line should increase much more rapidly over the next, I'd say, 5 to 10 years than the top line basically increases because they've got a lot of their major out-of-control spend done nowadays. And so the story is really around earnings per share growth, in my opinion, from 2025 to 2035 versus revenue growth like it was in, you know, the Jeff Bezos era, right, where it's just revenue, revenue, revenue.
So, you know, you could value the stock anywhere between about a 35 P/E and a 55 P/E given the growth rates, and it's Amazon. And so 35 to 55 is fair. So if you buy the stock today right at 207, even compound annual growth rate on the low end under my scenario here is about 17% on the high end about 31%. That's pretty darn attractive.