$Palantir Technologies Inc.(PLTR)$
PLTR‘s price
Big data and analytics playerPalantir Technologies stock(NYSE:PLTR) has rallied by almost 20% over the last month, considerably outperforming the S&P 500 which was up by just about 3% over the same period. There are a couple of factors driving the recent gains. Firstly, investors are likely seeing a lot more value in Palantir stock, which now remains down by over 50% year-to-date, and by almost 75% from its 2021 highs. Palantir has also struck up multiple deals of late with clients including auto major Stellantis, waste and recycling software provider Rubicon Technologies, and global commodities trader Trafigura. The company’s government business also won a large follow-on contract from U.S. Space Systems Command, a division of the U.S. Space Force. Investors likely see these diverse deals as a testament to the company’s strength in the AI and big data space.
Now, there are clearly some risks for Palantir stock. The company’s revenue growth is slowing down, with the company projecting base case revenues of $470 million for Q2 2022, marking a growth of just about 25% year-over-year, down from 49% in the year-ago quarter. Moreover, the market’s continued pivot away from unprofitable and high-multiple stocks could also hurt the company as interest rates continue to rise and U.S. GDP growth slows down. That said, we think that the risk to reward tradeoff for Palantir looks quite compelling at current levels. Despite the potentially transitory headwinds in the current environment, Palantir’s long-term outlook remains intact. The company continues to project annual revenue growth of 30% or greater through 2025, and there could be an upside to this considering the longer-term geopolitical ramifications of the Russia-Ukraine conflict, and also as artificial intelligence plays a greater role in the economy. At the current market price, PLTR stock trades at just under 9x consensus 2022 revenue and just about 7x 2023 revenue estimates, which is actually well below the broader software sector despite the company’s above-average growth.
Legendary Investor Stanley Druckenmiller on Bitcoin
On Thursday (June 9), American billionaire investor Stanley Freeman Druckenmiller shared his latest thoughts on crypto.
Druckenmiller started his career as an equities analyst at Pittsburgh National Bank. Then in 1981, he founded investment firm Duquesne Capital Management, which had a positive return every year until he decided in August 2010 to quit the hedge fund business and close his firm.
On Bitcoin ($BTC)
- He used to think that “crypto and Bitcoin are a solution in search of a problem”.
- As Bitcoin went “from like $50 to $17,000”, he refused to buy, hated the fact that he didn’t own Bitcoin as the price kept going up, and basically “felt like a moron”.
- Then, last year, near the start of the COVID-19 pandemic, when the Fed and other major central banks started going “nuts” with their money printing, he realized this was the problem that Bitcoin was designed to deal with.
- Another thing that had a major influence on him was legendary billionaire macro investor Paul Tudor Jones, informing him that “when Bitcoin went from $17,000 to $3000”, 86% of those that owned it at $17,000 “never sold it”. This got Druckenmiller to look at Bitcoin as “something with a finite supply” where “86% of the owners are religious zealots”.
- Then, finally, around the middle of last spring, Druckenmiller FOMOed into Bitcoin, but he found buying Bitcoin in the kind of quantity that made sense to him (around $100 million worth) much more difficult than doing a similar thing with gold, and so “like an idiot” he “stopped buying it”, and the next thing he knew, the Bitcoin price had reached $36,000.
- Since his “heart’s never been in it”, he sold some of his Bitcoin holdings in order to recover his costs, and kept the remaining amount.
- Recently, he discovered that Palantir Technologies (NYSE: PLTR), which the Duquesne Family Office is a major shareholder of, “has announced that its going to start accepting Bitcoin” and that in fact this kind of adoption of Bitcoin is “happening all over the place”.
- As for the future, he thinks that “as long as Jay Powell keeps acting like he’s been acting” gold and Bitcoin are “going to have the wind behind them”.
SOURCE：Trefis
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