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Palantir was a data analytics company but now labeled an AI company and as such has been on a tear in recent weeks, doubling in price since March 8. 

However, there are some reasons for me to be cautious about the stock. 

  • First, CEO Alex Karp is a controversial figure. He has been criticized for his ties to the intelligence community and for his libertarian views (neither bothers me but just sentiment). 
  • Second, while Palantir's AI technology is impressive, it is still in its early stages of development. It is not clear how the company will be able to monetize its technology in the long run.
  • Third, Palantir's valuation is very high based on my discounted cash flow analysis. This is a significant premium to the valuation of other software companies.
  • Fourth, Palantir's business model is heavily reliant on government contracts. This could make the company vulnerable to changes in government spending.
  • Fifth, Palantir's growth is not as explosive as some other growth stocks. The company's revenue growth is expected to slow to the mid-teens in the coming years. Earnings have grown 12.3% per year over the past 5 years
  • Sixth, Analyst Ratings have a 1 year target of $8 on the stock - and it is trading nearly double that.  
  • Institutions own only 30% of the stock - very low. 

The IADSS Chart did trigger a buy right before the rampage so I regret I missed that but it was not a stock on my daily watch list. 

Net net I think there are cleaner shirts in the laundry. 


Comments

Anonymous

What is the link to subscribe to IADSS? Can we input any stock or crypto and get the buy & sell signals?

Anonymous

Thanks James this is of great help What are your views about AMD long term looking out 1-2 years?

InvestAnswers

it works for anything.... even pairs, FX, commodities, etc. https://www.investanswers.io/iadss

InvestAnswers

i did an analysis of AMD vs NVDA last year and NVDA won. I think AMD are behind on AI chips... but all semis are hot now

Anonymous

Hi James, do you have any links to stories criticizing Alex Karp's ties to the intelligence community? My greatest hesitation about PLTR is the CEO, he comes off as very arrogant and given his Ph.D. is nowhere near data/analytics/compsci/stats it is hard to believe he has a deep understanding of what he speaks. Reminds me a lot of Balmer.

Anonymous

Not trying to be the contrary .. but, if the company has been around approximately for 20 years and they almost exclusively hired their AI developer from Standford ... is that really just beginning? Seems Thiel had the intention via his Book "Zero to One" to start a company with a moat. However, I can't argue with Valuation or Technicals.

Anonymous

I bought in at $7.14 and now up 82%. Wish I had been doing that instead of sitting on bitcoin and sol.

Anonymous

Gates thinks he is an expert on everything. Maybe Balmer learned from Gates. Nonetheless, it's good they are both gone.

Anonymous

I’m sure that Peter Theil will keep Alex in line if needed. Didn’t jump in on this one either. Any thoughts on quantum computing? That would add rocket fuel to AI I think.

Anonymous

QC is still in its infancy. It’s a whole different animal. My opinion, of course.

Anonymous

I ditched Palentir at the bottom for faster horses before the AI craze. Oh well!

InvestAnswers

Their AI is designed around listening and not thinking.... their AI is not Turing Complete.... that is my point

Anonymous

Okay, so it cannot emulate Alan Turing's machine. So, AGI would be able to solve such a problem.

Anonymous

https://twitter.com/aakashg0/status/1664836865185452038?s=46&t=WOV2cf0EBiFGaijTpE25NQ Great AI post

Anonymous

I agree about Gates as well, but Gates is still smarter than Balmer haha. PLTR gives me 80-90's MSFT vibes.

Anonymous

Hi James! Just joined. Been following the channel since late 2021.

Anonymous

Mmm. Why can't I get Palantir to show me signals on DCAS?

Anonymous

So we buy a tiny position James or should we wait for a deep (NFA ofc course) ?

Anonymous

IADSS: Is there a link on how to access this tool

Anonymous

James, Do you expect a pull back on PLTR? If so to what level...I want to buy more but not at this level.