Palantir: Strong AI Buy For The Long-Term

seekingalpha2023-07-09

SummaryPalantir is a unique market-leading company operating in an atmosphere with enormous growth and profitability potential.Palantir could surpass future sales and EPS projections, enabling its ...

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Sigit waloyo
·2023-07-10
Morning
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- Sigit waloyo:
  night
  2023-07-11
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klarky
·2023-07-09
Beven wheeling this stock since it listed. Been a nice earner! Looking to hold 1000 shares longterm 10 years to see what happens.
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Ahvi
·2023-07-09
Amazing
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Palantir's stock surged, roughly doubling since my article i","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"translate_title":"Palantir：长期强势人工智能买入","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PLTR":1},"content_text":"SummaryPalantir is a unique market-leading company operating in an atmosphere with enormous growth and profitability potential.Palantir could surpass future sales and EPS projections, enabling its stock price to move much higher in the coming years.Palantir is at the cutting edge of AI, and its Artificial Intelligence Platform \"AIP\" and other market-leading initiatives should elevate the company to a new level. Therefore, we could see Palantir beat consensus analysts' revenue growth and EPS expectations, leading to better-than-expected growth, higher-than-anticipated profitability, and a much higher stock price in the coming years.Palantir - Should Go Much Higher Long-TermPLTR (StockCharts.com)Palantir has made a remarkable jump with all the AI talk recently. The company's stock surged about 100% since my bullish note last May. However, the recent rally was mainly a near-term knee-jerk reaction move, and the stock likely has more upside ahead in the intermediate and long term.In early April, we saw the 50-day MA cross above the 200-day MA (a bullish technical development). In addition, we saw a successful retest of the crucial $7.50 support level before the stock skyrocketed in early May. Increasing buy interest on high volume brought the stock up to highly overbought levels at around $17.However, we saw a 20% pullback, providing a compelling long-term entry point below $14. The stock should stabilize, consolidate, and proceed higher in the intermediate and long term. While the stock trades around $15 today, I'm keeping my 2025 price target at $50 for Palantir.Palantir - Unprecedented DemandI've discussed what makes Palantir so unique in prior analyses. The most basic way to describe the phenomenon is that while Palantir has many competitors, few companies offer comprehensive big data analytics solutions like Palantir. Various companies with different target markets provide products and services that may compete with Palantir in some way. However, Palantir provides the \"complete package,\" and no one else does.Therefore, Palantir can charge $141,000 for its Gotham platform. Palantir works with various critical government agencies and many Fortune 500 companies. Moreover, Palantir's products and services are well worth their price tag, as the company's unique software helps solve problems that could cost far more. Palantir is a monopolistic-style company operating in a blue ocean atmosphere, implying enormous growth prospects and substantial profit potential ahead.\"Demand for AIP is like nothing I've ever seen in 20 years of being involved in Palantir\" - Palantir CEO Alex Karp.The company's co-founder Peter Thiel expressed a similar view, citing unprecedented demand for Palantir's new AIP. The first version of its AI platform was made available to some clients in May. Yet, the future government and civilian prospects for Palantir and AI remain vast. Palantir is already ahead of its competition, but its AI capabilities provide an additional edge. Palantir should capitalize on the AI opportunities, improving its market position as we advance.The World is a Dangerous PlaceWhen there is conflict, Palantir comes to the rescue. Software developed by Palantir has enabled the speed, accuracy, and deadliness of Ukrainian artillery strikes to improve dramatically. Palantir's AI-powered solutions have enabled the Ukrainians to shift the tide of war in their favor. Russia's artillery warfare is akin to something we saw on battlefields one hundred years ago. In comparison, the Ukrainian army fights a much more efficient war due to the help from Palantir and AI.We see Palantir on the front lines of a real-time conflict, and its products and services are helping Ukraine win its war for freedom. Palantir is closely linked to the CIA, an early investor in the company. Additionally, Palantir works closely with many prominent government agencies and has the trusted stamp of approval from the U.S. government. Palantir works with the FBI, NSA, CIA, and other critical government agencies. Therefore, Palantir should continue increasing revenues and expanding market share as the company advances in the coming years.Palantir - Keeps Bagging ContractsU.S. revenue growth (investors.palantir.com)Despite the transitory economic slowdown, U.S. commercial and government revenue growth increased considerably in the company's latest earnings announcement (Q1 2023). U.S. commercial revenue growth came in at 26%, while U.S. government-related revenues increased by 22% YoY. Government contracts are generous, safe and should continue rising over time.Moreover, Palantir continues closing deals. Recently, Palantir was awarded a handsome U.S. Special Operations Command contract worth $463M. Palantir should continue expanding government and commercial-related revenues in the U.S. and abroad. Moreover, the company's revenue growth rate could increase as the economy recovers from the temporary slowdown and AI-related demand increases in the coming years.Commercial Segment - Unlimited Growth ProspectsCustomer count growth (investors.palantir.com )While Palantir works with many government agencies, its potential on the commercial side is almost limitless. Palantir's retail customer count surged by 52% YoY in Q1. The company's total customer count (government and commercial) increased by 41% in its latest reported quarter. Also, nearly $200 million of the company's $525 million in revenues came from outside the U.S. last quarter. This dynamic illustrates that Palantir has significant growth potential in the U.S. (government and commercial) and substantial growth prospects outside the U.S. with government agencies and commercial clients.Contract value and billings (investors.palantir.com)Despite revenue growth declining to 18% YoY in Q1, Palantir's billings increased by 25%, and its total contract value surged by 60%. This dynamic implies that despite the transitory slowdown in quarterly revenues, Palantir's revenues should continue increasing in the coming years. Moreover, as the economy stabilizes, the temporary slowdown concludes, and growth returns, Palantir's revenue growth could accelerate to approximately 25-30%.Valuation - Not As High As It SeemsRevenue estimates (SeekingAlpha.com )Estimates regarding Palantir's growth and profitability may be overly pessimistic now. Instead of $2.63B, Palantir could provide $2.85B in revenues or slightly higher in 2024, and it could achieve $3.55B or more instead of the lowballed consensus estimate of just $3.2B in 2025. Moreover, Palantir's better-than-anticipated growth should improve profitability in future quarters and the coming years.EPS estimates (SeekingAlpha.com )Consensus estimates project 20-30% EPS growth in future years. However, Palantir's EPS growth could be higher, especially if it successfully returns to a higher sales growth rate. If Palantir can return to a 25-30% revenue growth rate, its EPS could rise by 30-40% in future years.Where Palantir's stock could be in future years:Year2023202420252026202720282029Revenue Bs$2.28$2.85$3.6$4.75$6$7.6$9.5Revenue growth20%25%28%29%27%26%25%EPS$0.25$0.33$0.46$0.64$0.86$1.18$1.59EPS growth317%32%40%38%36%35%34%Forward P/E45464748474442Stock price$15$21$30$41$55$70$87Source: The Financial ProphetDue to Palantir's unique market-leading position in AI and other areas, vast growth opportunities, and significant profitability potential, it deserves to trade at a relatively high P/E multiple of 40-50. Moreover, Palantir's growth and profitability could increase as the transitory slowdown concludes and growth returns to the global economy. Furthermore, Palantir has excellent growth prospects at home and abroad, with governments and on the corporate side. Therefore, Palantir's sales and profitability should increase more than anticipated, enabling its stock price to go much higher in the coming years.Risks to PalantirThe most significant near-term risk factor may be a temporarily high valuation and overbought technical conditions. Also, market participants should consider several potential risks associated with an investment in Palantir. The company's earnings could come in lower than expected, and its revenue growth could be less than anticipated. Furthermore, if Palantir's growth picture turned less bullish, the stock could correct significantly from current levels. Additionally, if Palantir lost favor with the government or had a data breach, the stock could experience a considerable decline. Also, AI is still in its early stages of development, and there are no guarantees that Palantir's AI program will be successful. Therefore, consider these and other risks before investing in Palantir.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":196143289975000,"gmtCreate":1688924115432,"gmtModify":1688924119376,"author":{"id":"4106663006772770","authorId":"4106663006772770","name":"Sigit waloyo","avatar":"https://static.itradeup.com/news/793d6f1c1bc32e2f7cdb8ef7a8931a1c","vip":1,"crmLevel":1,"crmLevelSwitch":1,"idStr":"4106663006772770","authorIdStr":"4106663006772770"},"htmlText":"Morning","listText":"Morning","text":"Morning","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":12,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/196143289975000","repostId":2349960068,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":106471102,"gmtCreate":1689017696313,"gmtModify":1689017702492,"authorId":4106663006772770,"author":{"id":4106663006772770,"idStr":"4106663006772770","authorId":4106663006772770,"name":"Sigit waloyo","avatar":"https://static.itradeup.com/news/793d6f1c1bc32e2f7cdb8ef7a8931a1c","vip":1,"crmLevel":1,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":196143289975000,"type":1,"supId":0,"prevId":0,"content":"<u>night</u>","text":"<u>night</u>","html":"<u>night</u>"}],"langContent":"EN"},{"id":196038257942744,"gmtCreate":1688898472846,"gmtModify":1688898476018,"author":{"id":"4126097619390902","authorId":"4126097619390902","name":"klarky","avatar":"https://community-static.tradeup.com/news/440ae307ae3a7b5cc1f7c25d579801d8","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":5,"crmLevelSwitch":1,"idStr":"4126097619390902","authorIdStr":"4126097619390902"},"htmlText":"Beven wheeling this stock since it listed. Been a nice earner! Looking to hold 1000 shares longterm 10 years to see what happens.","listText":"Beven wheeling this stock since it listed. Been a nice earner! Looking to hold 1000 shares longterm 10 years to see what happens.","text":"Beven wheeling this stock since it listed. Been a nice earner! Looking to hold 1000 shares longterm 10 years to see what happens.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":13,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/196038257942744","repostId":2349960068,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":196033032741032,"gmtCreate":1688897170238,"gmtModify":1688897174274,"author":{"id":"3574166160473753","authorId":"3574166160473753","name":"Ahvi","avatar":"https://static.tigerbbs.com/bd216b3fbf19641a7fe648254585ce79","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3574166160473753","authorIdStr":"3574166160473753"},"htmlText":"Amazing&nbsp;","listText":"Amazing&nbsp;","text":"Amazing","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":12,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/196033032741032","repostId":2349960068,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":86,"commentSize":3,"repostSize":1,"favoriteSize":5,"likeStatus":false,"favoriteStatus":false}}