When I listen to the CEO talk

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hippyboy
2023-09-15

When I listen to the CEO talk at the earnings call... [Facepalm]

Palantir: The "Nvidia Moment" Is Coming

Palantir's stock has been bid up due to sustained interest in generative AI, but it has yet to see the same impact on fundamentals as other AI companies like Nvidia.The company generated a GAAP profit

Palantir: The "Nvidia Moment" Is Coming

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{"i18n":{"language":"en_US"},"data":{"magic":2,"id":220233482567776,"tweetId":"220233482567776","gmtCreate":1694789337076,"gmtModify":1694789341399,"author":{"id":4114990446205212,"idStr":"4114990446205212","authorId":4114990446205212,"authorIdStr":"4114990446205212","name":"hippyboy","avatar":"https://community-static.tradeup.com/news/588f9c8cf3fe551e3d0f15fc9b883792","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":5,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"html":"<html><head></head><body>When I listen &nbsp;to the CEO talk at the earnings call...&nbsp;[Facepalm]&nbsp;</body></html>","htmlText":"<html><head></head><body>When I listen &nbsp;to the CEO talk at the earnings call...&nbsp;[Facepalm]&nbsp;</body></html>","text":"When I listen to the CEO talk at the earnings call... [Facepalm]","highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/220233482567776","repostId":2367689470,"repostType":2,"repost":{"id":"2367689470","kind":"highlight","pubTimestamp":1694706491,"share":"https://www.laohu8.com/m/news/2367689470?lang=&edition=full","pubTime":"2023-09-14 23:48","market":"us","language":"en","title":"Palantir: The \"Nvidia Moment\" Is Coming","url":"https://stock-news.laohu8.com/highlight/detail?id=2367689470","media":"Seekingalpha","summary":"Palantir's stock has been bid up due to sustained interest in generative AI, but it has yet to see the same impact on fundamentals as other AI companies like Nvidia.The company generated a GAAP profit","content":"<html><head></head><body><ul style=\"\"><li>Palantir&#39;s stock has been bid up due to sustained interest in generative AI, but it has yet to see the same impact on fundamentals as other AI companies like Nvidia.</li><li>The company generated a GAAP profit for the third consecutive quarter and will soon be eligible for inclusion in the S&amp;P 500 market index.</li><li>Palantir has a net cash balance sheet and has authorized a share repurchase program.</li><li>A lot of optimism is priced in, but I expect upside ahead as revenue growth accelerates.</li></ul><a href=\"https://laohu8.com/S/PLTR\">Palantir</a> has seen its stock bid up amidst sustained interest in generative AI. While other generative AI names like Nvidia (NVDA) have seen a dramatic impact to their fundamentals (which have led to equally dramatic impacts to the stock price), PLTR still has yet to see such an impact. Given that PLTR is a top tier implementer of artificial intelligence solutions, I view it as being just a matter of time before revenue growth accelerates to a level more indicative of the expectations placed upon the company. The company generated a GAAP profit for the third consecutive quarter and will soon be eligible for inclusion in the S&amp;P 500 market index. While the current valuation makes PLTR one of the more richly valued names in the tech sector, I see upside still ahead based on my thesis for accelerating top-line growth. I reiterate my buy rating for the stock as the net cash balance sheet, GAAP profitability, and announced share repurchase program round out an attractive growth thesis.<h2 id=\"id_941385379\">PLTR Stock Price</h2>PLTR has always been a hyped stock, in the past that hype was due in large part to the company&#39;s secretive profile. That hype worked against the company during the 2022 crash in tech stocks, but the company is in the spotlight yet again due to the rise of generative AI.<img src=\"https://static.tigerbbs.com/5c839f9ba42bf3ea90d4d3955947fe63\" tg-width=\"635\" tg-height=\"417\"/>Data by YChartsI last covered PLTR in July where I rated the stock a buy due to the potential for accelerating growth from generative AI. That prediction has not yet played out, and the stock has been roughly flat since then. Patient investors may be rewarded here.<h2 id=\"id_3417462756\">PLTR Stock Key Metrics</h2>In its most recent quarter, PLTR delivered 13% YoY revenue growth to $533 million, slightly ahead of guidance for $532 million.<img src=\"https://static.tigerbbs.com/33c257d67705229ab7f5b6e6b020b1df\" tg-width=\"1280\" tg-height=\"597\"/>2023 Q2 PresentationGovernment revenue grew 15% YoY to $302 million, with US Government revenue growing slower at 10%. Commercial revenue (enterprise sales) grew 10% YoY to $232 million, with US commercial revenue growing faster at 20%.<img src=\"https://static.tigerbbs.com/d727ae4116511b1e2e42f111d46d2d4a\" tg-width=\"1280\" tg-height=\"610\"/>2023 Q2 PresentationThese growth rates are respectable given the tough macro environment, but clearly PLTR isn&#39;t seeing the boon that NVDA has shown in its data center growth. There&#39;s reasons for optimism though, as PLTR continued to see rapid customer growth and billings growth came in at 52%.<img src=\"https://community-static.tradeup.com/news/7a4df17c8da2bf18949ce5f62f661e1c\" tg-width=\"1280\" tg-height=\"605\"/>2023 Q2 PresentationPLTR delivered another quarter of margin expansion with its non-GAAP operating margin hitting 25% in the quarter, surpassing estimates for $122 million in operating income.<img src=\"https://static.tigerbbs.com/12bb1edd0f58aaa657a4336c56fa6190\" tg-width=\"1280\" tg-height=\"674\"/>2023 Q2 PresentationOn a GAAP basis, PLTR was profitable for the third consecutive quarter (second consecutive quarter of GAAP operating profitability). Unlike many tech peers which embarked on aggressive layoffs, PLTR&#39;s own layoff was more modest and its margin expansion has been instead driven by cold-blooded operating leverage.<img src=\"https://static.tigerbbs.com/00c1c3583eafdfe73dc81c9f534f4f13\" tg-width=\"1280\" tg-height=\"668\"/>2023 Q2 PresentationPLTR ended the quarter with a $3.1 billion net cash balance sheet position, which pairs well with the solid free cash flow generation. Net cash made up roughly 10% of the current market cap.<img src=\"https://static.tigerbbs.com/083859dab479f6d473ac36afc0b60cc4\" tg-width=\"1280\" tg-height=\"675\"/>2023 Q2 PresentationLooking forward, PLTR expects up to $557 million in third quarter revenues, implying some sequential acceleration to 16.5% YoY growth. I expect PLTR to have its own &#34;Nvidia moment,&#34; but we may need to wait several quarters for that to occur. For the full-year, management is guiding for over $2.212 billion in revenue, a tighter target from the prior target of $2.185 billion to $2.235 billion. Management expects to generate a 26% non-GAAP operating margin for the full year.<img src=\"https://community-static.tradeup.com/news/c6a2afa592ed320c7273c7b71b41e306\" tg-width=\"1280\" tg-height=\"554\"/>2023 Q2 PresentationManagement also announced a $1 billion share repurchase program. The company certainly has the financial flexibility to execute upon such a program, and such purchases may make a lot of sense if and when revenue growth accelerates in the future.On the conference call, management noted that the company may become eligible for inclusion in the S&amp;P 500 market index after the next quarter on account of having generated a GAAP profit for 4 quarters. That inclusion may spark some rally in the stock price but is not crucial to my investment thesis.Analysts may have been concerned regarding both the lack of visibility in when generative AI may help to accelerate growth, as well as management&#39;s plans to do so. Even prior to the rise of generative AI, management has long emphasized that they have a deceivingly long growth runway ahead of them due to its customers often needing to be educated as to why they need their products. That stance applies equally, if not to an even greater extent, with generative AI. Management stated that they &#34;will figure out how to monetize it&#34; and that they are first &#34;teaching the market what it is&#34; (&#34;it&#34; referring to their Artificial Intelligence Platform).<h2 id=\"id_1202229095\">Is PLTR Stock A Buy, Sell, or Hold?</h2>That brings us to the investment thesis. PLTR plays a crucial role in enabling AI and generative AI for the masses.<img src=\"https://static.tigerbbs.com/49668a4c21f24f9bf5f65c12a693d7d9\" tg-width=\"1280\" tg-height=\"610\"/>2023 Q2 PresentationAlmost every company is likely to be impacted by generative AI by some shape or form. But not every company may have management that knows how that impact might look, or the technical expertise to integrate generative AI into their platforms. In their shareholder letter, CEO Karp states that &#34;the demand for AIP is unlike anything we have seen in the past twenty years,&#34; adding that they are &#34;in discussions with more than three hundred additional enterprises to deploy AIP within their organizations.&#34; Generative AI is arguably exactly what the company has been waiting for in terms of accelerated adoption of its products.PLTR has been rewarded with rich valuations by the market, perhaps spurred by a glowing endorsement by analyst Dan Ives. The stock recently traded hands at around 15x this year&#39;s sales estimates.<img src=\"https://community-static.tradeup.com/news/63a6460c6056755c5dbf99b723fe551c\" tg-width=\"907\" tg-height=\"197\"/>Seeking AlphaI wouldn&#39;t be surprised if revenue growth eventually accelerates to the 30% - 35% level upon increased generative AI adoption as well as an improving macro environment. Assuming 25% revenue growth, 30% long term net margins, and a 1.5x price to earnings growth ratio (&#39;PEG ratio&#39;), I see the stock trading at around 11.3x sales. The stock is pricing in several years of growth but quickly grows into that valuation over time. Based on where NVDA is trading today, PLTR may see its PEG ratio bid more to the 2x to 2.5x range upon experiencing acceleration in top-line growth.What are the key risks? This is an execution story, and it is possible that revenue growth does not accelerate or does not accelerate meaningfully even as generative AI plays out. In particular, one may wonder why NVDA is already seeing accelerated purchases from the cloud titans yet PLTR has yet to see increased adoption of its own. While the company&#39;s net cash balance sheet and GAAP profitability help to support a premium valuation, the current valuation is unsustainable (or at the very least quite ordinary) if revenue growth does not accelerate meaningfully. There is the possibility that generative AI proves to be a headwind, not a tailwind, to the business if it turns out that adoption of the technology is intuitive and easy and not necessitating professional implementation. The cloud titans are likely to be highly incentivized to help with implementation and thus may be the causes of such risk.Between GAAP profitability, share repurchases, inevitable inclusion in the S&amp;P 500 index, and potential for generative AI-induced revenue growth acceleration, the stars are aligning for PLTR. I reiterate my buy rating, held back from a &#34;strong buy&#34; rating only due to the valuation which has already incorporated potential generative AI impact.</body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir: The \"Nvidia Moment\" Is Coming</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir: The \"Nvidia Moment\" Is Coming\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-09-14 23:48 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4635143-palantir-nvidia-moment-coming>Seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nPalantir's stock has been bid up due to sustained interest in generative AI, but it has yet to see the same impact on fundamentals as other AI companies like Nvidia.The company generated a GAAP profit...\n\n<a href=\"https://seekingalpha.com/article/4635143-palantir-nvidia-moment-coming\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"source_url":"https://seekingalpha.com/article/4635143-palantir-nvidia-moment-coming","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2367689470","content_text":"Palantir's stock has been bid up due to sustained interest in generative AI, but it has yet to see the same impact on fundamentals as other AI companies like Nvidia.The company generated a GAAP profit for the third consecutive quarter and will soon be eligible for inclusion in the S&P 500 market index.Palantir has a net cash balance sheet and has authorized a share repurchase program.A lot of optimism is priced in, but I expect upside ahead as revenue growth accelerates.Palantir has seen its stock bid up amidst sustained interest in generative AI. While other generative AI names like Nvidia (NVDA) have seen a dramatic impact to their fundamentals (which have led to equally dramatic impacts to the stock price), PLTR still has yet to see such an impact. Given that PLTR is a top tier implementer of artificial intelligence solutions, I view it as being just a matter of time before revenue growth accelerates to a level more indicative of the expectations placed upon the company. The company generated a GAAP profit for the third consecutive quarter and will soon be eligible for inclusion in the S&P 500 market index. While the current valuation makes PLTR one of the more richly valued names in the tech sector, I see upside still ahead based on my thesis for accelerating top-line growth. I reiterate my buy rating for the stock as the net cash balance sheet, GAAP profitability, and announced share repurchase program round out an attractive growth thesis.PLTR Stock PricePLTR has always been a hyped stock, in the past that hype was due in large part to the company's secretive profile. That hype worked against the company during the 2022 crash in tech stocks, but the company is in the spotlight yet again due to the rise of generative AI.Data by YChartsI last covered PLTR in July where I rated the stock a buy due to the potential for accelerating growth from generative AI. That prediction has not yet played out, and the stock has been roughly flat since then. Patient investors may be rewarded here.PLTR Stock Key MetricsIn its most recent quarter, PLTR delivered 13% YoY revenue growth to $533 million, slightly ahead of guidance for $532 million.2023 Q2 PresentationGovernment revenue grew 15% YoY to $302 million, with US Government revenue growing slower at 10%. Commercial revenue (enterprise sales) grew 10% YoY to $232 million, with US commercial revenue growing faster at 20%.2023 Q2 PresentationThese growth rates are respectable given the tough macro environment, but clearly PLTR isn't seeing the boon that NVDA has shown in its data center growth. There's reasons for optimism though, as PLTR continued to see rapid customer growth and billings growth came in at 52%.2023 Q2 PresentationPLTR delivered another quarter of margin expansion with its non-GAAP operating margin hitting 25% in the quarter, surpassing estimates for $122 million in operating income.2023 Q2 PresentationOn a GAAP basis, PLTR was profitable for the third consecutive quarter (second consecutive quarter of GAAP operating profitability). Unlike many tech peers which embarked on aggressive layoffs, PLTR's own layoff was more modest and its margin expansion has been instead driven by cold-blooded operating leverage.2023 Q2 PresentationPLTR ended the quarter with a $3.1 billion net cash balance sheet position, which pairs well with the solid free cash flow generation. Net cash made up roughly 10% of the current market cap.2023 Q2 PresentationLooking forward, PLTR expects up to $557 million in third quarter revenues, implying some sequential acceleration to 16.5% YoY growth. I expect PLTR to have its own \"Nvidia moment,\" but we may need to wait several quarters for that to occur. For the full-year, management is guiding for over $2.212 billion in revenue, a tighter target from the prior target of $2.185 billion to $2.235 billion. Management expects to generate a 26% non-GAAP operating margin for the full year.2023 Q2 PresentationManagement also announced a $1 billion share repurchase program. The company certainly has the financial flexibility to execute upon such a program, and such purchases may make a lot of sense if and when revenue growth accelerates in the future.On the conference call, management noted that the company may become eligible for inclusion in the S&P 500 market index after the next quarter on account of having generated a GAAP profit for 4 quarters. That inclusion may spark some rally in the stock price but is not crucial to my investment thesis.Analysts may have been concerned regarding both the lack of visibility in when generative AI may help to accelerate growth, as well as management's plans to do so. Even prior to the rise of generative AI, management has long emphasized that they have a deceivingly long growth runway ahead of them due to its customers often needing to be educated as to why they need their products. That stance applies equally, if not to an even greater extent, with generative AI. Management stated that they \"will figure out how to monetize it\" and that they are first \"teaching the market what it is\" (\"it\" referring to their Artificial Intelligence Platform).Is PLTR Stock A Buy, Sell, or Hold?That brings us to the investment thesis. PLTR plays a crucial role in enabling AI and generative AI for the masses.2023 Q2 PresentationAlmost every company is likely to be impacted by generative AI by some shape or form. But not every company may have management that knows how that impact might look, or the technical expertise to integrate generative AI into their platforms. In their shareholder letter, CEO Karp states that \"the demand for AIP is unlike anything we have seen in the past twenty years,\" adding that they are \"in discussions with more than three hundred additional enterprises to deploy AIP within their organizations.\" Generative AI is arguably exactly what the company has been waiting for in terms of accelerated adoption of its products.PLTR has been rewarded with rich valuations by the market, perhaps spurred by a glowing endorsement by analyst Dan Ives. The stock recently traded hands at around 15x this year's sales estimates.Seeking AlphaI wouldn't be surprised if revenue growth eventually accelerates to the 30% - 35% level upon increased generative AI adoption as well as an improving macro environment. Assuming 25% revenue growth, 30% long term net margins, and a 1.5x price to earnings growth ratio ('PEG ratio'), I see the stock trading at around 11.3x sales. The stock is pricing in several years of growth but quickly grows into that valuation over time. Based on where NVDA is trading today, PLTR may see its PEG ratio bid more to the 2x to 2.5x range upon experiencing acceleration in top-line growth.What are the key risks? This is an execution story, and it is possible that revenue growth does not accelerate or does not accelerate meaningfully even as generative AI plays out. In particular, one may wonder why NVDA is already seeing accelerated purchases from the cloud titans yet PLTR has yet to see increased adoption of its own. While the company's net cash balance sheet and GAAP profitability help to support a premium valuation, the current valuation is unsustainable (or at the very least quite ordinary) if revenue growth does not accelerate meaningfully. There is the possibility that generative AI proves to be a headwind, not a tailwind, to the business if it turns out that adoption of the technology is intuitive and easy and not necessitating professional implementation. The cloud titans are likely to be highly incentivized to help with implementation and thus may be the causes of such risk.Between GAAP profitability, share repurchases, inevitable inclusion in the S&P 500 index, and potential for generative AI-induced revenue growth acceleration, the stars are aligning for PLTR. I reiterate my buy rating, held back from a \"strong buy\" rating only due to the valuation which has already incorporated potential generative AI impact.","news_type":1},"isVote":1,"tweetType":1,"viewCount":397,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":53,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}