It Surged Tenfold in Two Years. What Makes PLTR So Appealing?

I've mentioned before that when it comes to the AI industry, what I'm most concerned about are its practical implementation, promotion, and when it can start generating profits.

 

In other words, it's about the application side of AI. And PLTR is hailed as the "Nvidia in the AI application field". Today, let's take a closer look at it.

 

 

Palantir derives its name from the magic crystal ball in The Lord of the Rings that can foresee the future.

 

In reality, Palantir is indeed using its own "magic" - data analysis - to gain insights into and predict the world.

 

 

Its AI platform can automatically learn and adapt to clients' business processes, providing them with more personalized data processing and the analysis of larger - scale datasets.

 

This not only enhances the efficiency and accuracy of data processing but also enables the automatic identification and extraction of key information, helping clients quickly uncover the potential value within the data.

 

You might not fully grasp this, so let me give you two examples.

 

 

For instance, the system spots a local wearing a light - purple hat.

 

Ordinarily, this would be an unremarkable scene. However, the Palantir system discovers that this color is extremely rare in the local area.

 

By continuously tracking this unusual feature and combining it with the analysis of other behavior patterns, it is eventually revealed that this person is actually an enemy planting mines.

 

 

Another example is during the COVID - 19 pandemic. In the initial stage of vaccine distribution, one had to consider dozens of variables simultaneously, such as the population distribution across 50 states, the temperature requirements of different vaccines, transportation conditions, population density, occupational characteristics, and age composition.

 

It's like solving a gigantic Rubik's cube.

 

The slightest error could lead to vaccine waste or improper distribution. But Palantir is the "Rubik's cube master" who can find the optimal solution within seconds. With the assistance of this "Eye of God", the US government can easily overlook the overall situation and has significantly improved its efficiency in handling affairs.

 

 

Since January 2023, the stock price of PLTR has been like a wild horse, surging from $7 to nearly $80. In just two years, PLTR's stock price has skyrocketed tenfold.

 

Now, let's take a look at its current valuation. According to the guidance provided in the company's third - quarter report: the revenue for the fourth quarter of 2024 is expected to be between $767 million and $771 million.

 

As shown in the figure above (from the company's third - quarter report), the net profit attributable to the parent company in the first three quarters of 2024 was $387 million.

Adding the adjusted operating income of $302 million as per the fourth - quarter guidance.

 

Since the company's profits can be adjusted, we'll make predictions based on operating revenue.

 

The operating revenue in 2024 is $2.805 billion. Assuming a 50% growth in operating revenue in 2025, the specific value would be $4.2075 billion.

 

With a net profit margin of 40%, the net profit would be $1.683 billion. Currently, the market capitalization of PLTR is $165.179 billion, resulting in a dynamic P/E ratio of 98.14 for 2025.

 

 

 

 

The company anticipates an annual revenue growth of 30%.

 

While this figure is impressive for an average company, it's not particularly outstanding for a technology company with a market capitalization often in the tens of billions of dollars.

 

In the long run, with the arrival of the 5G era, the demand for data analysis will only increase.

 

Palantir's technological accumulation and government connections in this field are like an insurmountable moat.

 

In the short term, though, its current valuation is indeed high, and the growth rate of its performance is far from sufficient to support the current stock price.

 

For investors planning to hold long - term (with a 5 - to 10 - year cycle), now might be a good time to gradually build a position.

 

After all, data is the oil of the new era, and Palantir is one of the most professional "drilling companies". But if you're a short - term investor, you may need more patience to wait for the right entry opportunity.