Palantir is the 18th-largest American firm.
Hitting a house run requires excellent timing: Swing too quickly — or too late — and also you miss the ball completely. Even for those who do make contact, analysis suggests {that a} batter must launch the ball at between 25 and 35 levels to hit a house run. Too excessive an angle ends in a pop fly; too low doubtless means a ground-out.
Fortunately for traders — who’re investing in shares, not hitting balls — timing would not should be excellent. You’ll be able to hit an investing residence run even for those who’re late to the social gathering. With that in thoughts, let’s take a more in-depth take a look at Palantir Applied sciences (PLTR -0.88%) and why I feel it could possibly nonetheless arrange traders for all times.
Picture supply: Getty Photographs.
What Palantir has already achieved
First, we should begin by acknowledging that Palantir inventory has loved an unbelievable run over the previous few years.
Since Aug. 5, 2022, shares of Palantir have superior by a mind-blowing 1,500% as of market shut Aug. 11. Meaning an funding of $10,000 made three years in the past would now be price $160,000.
Moreover, Palantir’s market cap has exploded. In late 2022, it stood at round $12 billion. As of this writing, Palantir’s market cap is $440 billion. That makes it the 18th-largest American firm, proper behind legendary vitality big ExxonMobil (market cap of $456 billion) and forward of company titans together with Financial institution of America ($342 billion), Coca-Cola ($303 billion), and AT&T ($201 billion).
In different phrases, maybe the “simple” cash has already been made with regards to Palantir.
But it surely’s essential to keep in mind that previous efficiency would not inform you the place a inventory goes. That is why it is essential to dig into Palantir’s financials to know the corporate’s potential.
The AI revolution may carry Palantir’s inventory a lot greater
As spectacular as Palantir’s latest inventory historical past is, the corporate could also be simply getting began. For proof, think about Palantir’s most up-to-date quarterly earnings report. It was an absurdly bullish report, highlighting a number of key elements.
- The corporate reported its first-ever $1 billion income quarter, with gross sales rising 48% year-over-year.
- Internet revenue surged by 144% to $326 million.
- Whole buyer depend skyrocketed by 43% from a yr in the past.
Briefly, Palantir’s enterprise is booming. Furthermore, analysts proceed to lift expectations of Palantir’s future income, because it turns into clear that organizations are lining up for Palantir’s AI-powered merchandise.
In response to estimates compiled by Yahoo! Finance, sell-side analysts now anticipate Palantir to generate $4.2 billion in income this yr (the 12 months ending on Dec. 31, 2025), and $5.6 billion subsequent yr. That might signify year-over-year progress of 46% and 34%, respectively.
Granted, proudly owning Palantir inventory comes with sure dangers. Valuation is one. The inventory trades at a price-to-sales (P/S) ratio of 137. That is astronomical — even for a tech inventory. Most megacap tech shares commerce at a P/S ratio under 20; some are under 10. Due to this fact, Palantir’s execution should stay flawless, or its inventory value will endure.
That mentioned, the corporate continues to ship incredible progress with every quarterly report. Due to this fact, I nonetheless view the inventory as worthy of consideration and assume that although the probabilities of one inventory setting anybody up for all times are slim, Palantir has mouth-watering potential. The AI revolution continues to choose up steam, and Palantir stays on the forefront.
Financial institution of America is an promoting associate of Motley Idiot Cash. Jake Lerch has positions in AT&T, Coca-Cola, and ExxonMobil and has the next choices: lengthy September 2025 $155 calls on Palantir Applied sciences and lengthy September 2025 $155 places on Palantir Applied sciences. The Motley Idiot has positions in and recommends Palantir Applied sciences. The Motley Idiot has a disclosure coverage.
