To The Moon

Investor enthusiasm about Palantir Technologies has driven the stock to sky-high valuation metrics.At Tuesday's close, Palantir was trading at 67 times its sales over the last 12 months. The S&P 500 index trades at 3.2 times sales. History suggests Palantir's stock could be peaking, at least in the short to medium term.We have seen this type of extended valuation before, especially during the 1999-2000 dot-com boom, and during the Covid pandemic era of 2020-2021.Amazon, an early dot-com darling, reached a price-to-sales peak of 66 times in 1999. Three years later, shares were down 88% amid concerns of retail weakness in a recession and about profitability -- Amazon wouldn't show a profit until 2003. But Amazon sales never shrank, with growth bottoming at 13% in 2001, and rebounding strongly the next year. The Amazon bulls of 1998 and 1999 were eventually proven correct; by 2005, Amazon shares were up 278% from three years earlier.Cloud names also saw extended valuations during the pand