Palantir Rant (PLTR): I'm Changing My Mind On The Unstoppable AI Juggernaut

[00:00:02]All right, everyone.

[00:00:04]Welcome to the Palantir rant video.

[00:00:07]We're going to go off the head and say some things that may sound a little crazy.

[00:00:12]And you know what?

[00:00:14]I may be changing my mind.

[00:00:16]I may be changing my mind, everybody.

[00:00:18]So, let's take it back to the beginning.

[00:00:21]I've covered Palantir for a very long time. I've covered Palantir since January 19th, 2021, right after it went public. I wrote my first article right after their first earnings.

[00:00:33]Now, I was very bullish shareholder since the direct listing.

[00:00:39]Stayed very bullish for a long time when it wasn't popular to be bullish Palantir, when a lot of people thought this company was a black box and a lot of people couldn't see the vision.

[00:00:50]A lot of people said that this company was nothing more than a CIA front.

[00:00:56]A lot of people didn't like it because Palantir couldn't talk about some of the things that they did.

[00:01:02]I think that was a crock of And you know what?

[00:01:06]I ended up being right.

[00:01:09]Some of us, admit, did a lot of DD on this. He went to war with people on this.

[00:01:17]A lot of people in retail were right when institutions were wrong.

[00:01:23]I, on the other hand, changed my mind around Q2, 2022, as the data went sideways, in my opinion. And then I was willing to change my mind again when the data supported. I'm willing to change my mind, but I've been neutral.

[00:01:41]I was bullish for quite some time once I became bullish again.

[00:01:45]Then I turned neutral since the end of 2024.

[00:01:51]And I haven't moved off that stance.

[00:01:52]Now, if you look at the last article, February 20th, 2026, I have not provided a new rating on Palantir since their Q1 earnings.

[00:02:06]Now, we look at the chart.

[00:02:10]Not good. Over the past year, it's down 8.21%.

[00:02:15]It reached 207 and change in the beginning of November.

[00:02:23]It is down call it I don't know 80 bucks or so, $78.

[00:02:34]It's down a long way.

[00:02:36]Tried making a comeback and it didn't do it.

[00:02:38]I told everybody on the way up this valuation made no no sense. I told everybody on the way up that stocks do not go up in straight lines.

[00:02:48]The last thing you want is for a stock to go up in a straight line and the valuation was so stretched the only way it could continue was to continue downward, not upward.

[00:03:00]Palantir wasn't getting to 500 billion and I don't think it's going to get to a 500 billion-dollar market cap within the next year or two. I just don't.

[00:03:10]I could be wrong. I hope I'm wrong for all of you and for myself because I'm a shareholder. But, crazy thing is I may not think that Palantir is that expensive anymore and I'm teetering on the side of changing my mind and going back bullish.

[00:03:27]And I think the data supports it.

[00:03:29]I'm going to go through some numbers and Palantir had trouble breaking out. It definitely has a problem because this is one of the best companies I've seen from a business fundamental standpoint. Put the numbers aside on evaluation basis.

[00:03:47]There's not a single blemish on the underlying business metrics that anybody can point out. This is one of the best companies in the market, hands down, from an operational standpoint.

[00:03:59]Problem was the stock got ahead of itself. It's not that the business wasn't working. The stock got ahead of itself.

[00:04:07]Now, if we look at the forward numbers from Palantir, the analyst community believes they will do a dollar 47 of EPS this year.

[00:04:22]That would be a 96.33% year-over-year growth rate.

[00:04:26]That puts their PE on this year's earnings at 87.25 times. For some people, that'd be very expensive. For me, that's expensive.

[00:04:35]But, the market is forward-looking.

[00:04:39]The real question is, what does it look like going forward?

[00:04:44]The analyst community thinks 41.4% revenue growth, or EPS growth, next year.

[00:04:53]$2.08.

[00:04:55]Trades at 61.7 times. Then, 2028, another 44.71% EPS growth year-over-year, doing $3.01, trades at 42.64 times. I don't think that that's that expensive for a company growing at this rate. And I'm going to say something that's going to sound a little crazy.

[00:05:18]Palantir could grow at 100% this year on EPS.

[00:05:22]And I think that they can grow more next year. There There's some reasons why. If we look at the revenue, the street is expecting 72.42% year-over-year growth this year, and 45% next year.

[00:05:38]I think next year's number could exceed 50%. Maybe 60. It really depends. I need two more quarters of data to really finish my model, but right now all the business metrics point that they're going going to exceed expectations, and I'm going to show you what I'm talking about.

[00:06:03]When you think about great companies, Palantir 11 straight quarters of acceleration in Q1 85% year-over-year revenue growth.

[00:06:13]16% quarter-over-quarter sequential growth.

[00:06:18]11 consecutive quarters of accelerating growth. And they just did $1.63 billion in revenue.

[00:06:26]You have the highest growth rate ever.

[00:06:30]The trajectory is astonishing.

[00:06:35]When I look at what they are guiding for, it looks like they're going to do 1.799 billion or close to 1.8 billion in Q2.

[00:06:47]Looks like they're going to do 2 billion in Q4.

[00:06:50]And I could be underestimating.

[00:06:55]The deal velocity is something people look over all the time. I argue this point quite frequently.

[00:07:02]In Q1, they did 206 deals for a million dollars or more.

[00:07:11]72 of those were over 5 million and 47 were over 10 million.

[00:07:17]You have a 48.2% year-over-year growth rate on deals over a million dollars.

[00:07:23]And a 51.61% growth rate on deals over 10 million.

[00:07:28]I got to tell you, that deal velocity is absolutely incredible.

[00:07:32]And the customer count keeps going higher.

[00:07:37]We're just over 1,000 customers now. 31% year-over-year growth rate on customers.

[00:07:43]US commercial 615 grew at 42% year over year.

[00:07:48]The free cash flow 899 million.

[00:07:53]Q1 55% margin When I look at this I see a company with incredible margins that is only going to scale and it is not capital intensive.

[00:08:08]Rule of 40 of 145 85% revenue growth, 60% adjusted operating margin.

[00:08:16]Absolutely incredible. Absolutely incredible.

[00:08:20]145 Not many companies are higher.

[00:08:26]US revenue crossed over 100% year over year for the first time.

[00:08:33]The business is firing. Anybody who doesn't believe in this company by now is absolutely crazy. They're absolutely crazy.

[00:08:42]Here's the one that helps me make my case.

[00:08:47]11.8 billion in remaining deal value, but the NDR the net dollar retention is now 150%.

[00:08:58]150% That's crazy ladies and gentlemen.

[00:09:03]That's crazy. Here's why.

[00:09:06]That means that and keep in mind Palantir does not include deals signed in the last 12 months in that number.

[00:09:17]So right now they're hitting 150% net dollar retention off of all their previous customers.

[00:09:25]That means that their prior deals on average are spending 50% more with Palantir.

[00:09:34]When I see 150% net dollar retention a rule of 40 a 145 and revenue scaling the way that it is I actually think the Palantir can exceed revenue expectations in Q2, Q3, and Q4 this year.

[00:09:51]I'm not seeing any signs of this business slowing down.

[00:09:57]I want to see Q2 earnings and Q3 earnings so I can make a more accurate model going forward because I want to see how much they exceed the street's estimates and their own guidance by.

[00:10:11]Yes.

[00:10:13]There are some headwinds that could impact their underlying profitability in the future.

[00:10:20]If the Fed cuts, which I believe they will do they will not generate as much interest income from their cash.

[00:10:29]At some point that will impact the numbers. It may not do it over the next several quarters, but next year it it could a little bit impact it, but the revenue growth with the free cash flow should offset it.

[00:10:43]The big thing for the growth next year is how much revenue they do this year because the comps year-over-year are going to get much harder. Last year, when you grow your revenue by 70, 80, 90% year-over-year that is such a drastic jump that you are now establishing such a bigger base to grow off of that's going to be harder to hit those numbers.

[00:11:12]But I'll tell you this at what was it? 45, 48 times 42.64 times 2028 if you're looking at this as the framework of every investment you are paying the present value of all future cash flow, Palantir does not look that expensive anymore because that's a 5 to 10 year statement, maybe even a 15 to 20 year statement. That's not for swing traders, that's not for day traders, that's for true long-term investors.

[00:11:50]If you're willing to pay today's price with these growth rates, you could be paying 20 to 25 times 2029 earnings.

[00:12:00]Palantir could also buy back a tremendous amount of shares. They don't have any debt. What are they going to spend their money on?

[00:12:07]If shares of Palantir keep going down, I think that management will buy back a lot of shares. I think that this company is starting to get really interesting again, and I'm going to show you what TipRanks thinks.

[00:12:22]Cuz we're going to go from the street estimates, not me.

[00:12:26]I should probably refresh list just to show that it's not like some thing. Palantir, the average estimate is 185.35.

[00:12:37]The street thinks that the low is 7-day, but the average is 185, which is 44.28% upside.

[00:12:47]I got to tell you, I don't know that I'm a 185 guy, but I'm willing to turn bullish again in the 120s, and I'm willing to turn very bullish again if this gets under 105.

[00:13:03]That may be too rich for some people on a trailing 12 basis, but I'm looking forward, and this no longer looks like the crazy valuation it once did.

[00:13:15]So, there you have it.

[00:13:17]I am changing my mind, and I'm becoming bullish again on Palantir, and that will be the reflection in the next article that I write, and I plan on getting it out next week. Thank you everybody for the Palantir rant. Do me a favor. If you like this video, please like it and subscribe to the channel and leave a comment that you like this style of video.

[00:13:37]Another rant video will be made this weekend.

[00:13:40]Have a great day everybody.