I'm Buying Palantir Stock (PLTR) After Earnings (Here's Why)

Summary

The video script discusses Palantir's recent stock crash after their earnings call, where despite beating top-line expectations and raising full-year guidance, the stock fell over 15%. The speaker argues Wall Street might be missing the big picture, highlighting Palantir's strong Rule of 40 score, accelerating commercial revenue growth, and the impact of their AIP boot camps on customer adoption. They differentiate Palantir's platform from generative AI, emphasizing its role in creating ontologies for enterprise data analysis. The script concludes by positioning Palantir positively on the speaker's list of stocks to watch, suggesting an undervalued opportunity amidst mainstream skepticism.

Takeaways

• 📉 Palantir's stock price has significantly dropped by over 15% following their latest earnings call, raising questions about the company's future valuation.
• 🔍 The speaker aims to analyze Palantir's earnings and highlight insights that Wall Street analysts might have overlooked.
• 🎯 The video intends to cover Palantir's Q1 earnings, the discrepancy between media coverage and the actual earnings call, and the speaker's personal investment perspective.
• 🤖 Despite beating top-line estimates and raising full-year guidance, Palantir's stock fell due to high expectations and deceleration in US commercial growth.
• 📊 Palantir's 'Rule of 40' score of 57 indicates strong financial performance, combining a 21% revenue growth with 36% adjusted operating margins.
• 📈 Palantir's commercial revenue growth is accelerating, with a 40% increase in the US, indicating a shift towards a larger total addressable market.
• 🏆 The AIP boot camps are identified as a significant factor in Palantir's growth, allowing customers to quickly implement AI solutions with hands-on experience.
• 💡 The speaker emphasizes the importance of understanding the underlying technology and business model of a company like Palantir before investing.
• 🚀 Palantir's platforms, Gotham and Foundry, provide a comprehensive view of enterprise data, enabling the creation of digital twins for complex data analysis and operational optimization.
• 🛡️ AIP, Palantir's interface for interacting with ontologies, offers control and auditing capabilities, adding business value to generative AI models.
• 📚 The video concludes with the speaker adjusting Palantir's position on their investment list, moving it up based on the company's market strategy and growth potential.

Q & A

Why did Palante's stock crash after their earnings call?

Palante's stock crashed over 15% due to a combination of high expectations and a perceived deceleration in their US commercial growth, which was down from 70% to 40%, and concerns about government agencies potentially reducing their dependency on Palante.

What is the 'Rule of 40' and how does Palante's score compare to other SaaS companies?

The 'Rule of 40' is a metric used to evaluate SaaS companies, where the sum of their growth rate and profit margins should exceed 40. Palante's score is 57, which is higher than companies like Splunk, Adobe, and Salesforce, indicating strong financial performance.

What is the significance of Palante's AIP boot camps in their growth strategy?

AIP boot camps are hands-on sessions that allow participants to work with Palante engineers to build real solutions using their own data. This approach significantly lowers the barrier to entry for using AI across various industries and has contributed to Palante's customer account growth.

How does the analyst Rousi Jura view Palante's business model and stock potential?

Rousi Jura views Palante as an overhyped software company with a heavy reliance on professional services and custom software, suggesting that the boot camp strategy may not be as effective as claimed. He has a $5 price target on the stock.

What is the difference between how Alex Karp and Yahoo Finance are discussing Palante's earnings?

Alex Karp, Palante's CEO, emphasizes the company's strong performance, particularly in the US commercial sector and through AIP boot camps. In contrast, Yahoo Finance focuses on the stock's decline and skepticism from some technologists and analysts about Palante's claims in the AI space.

What is the role of ontologies in Palante's platforms Gotham and Foundry?

Ontologies, or digital twins, are maps of a company's resources and their relationships. Palante's platforms help companies build and use these ontologies to analyze data, track assets, and optimize operations, providing a real-time, comprehensive view of enterprise data.

How does Palante's AIP platform differ from being a generative AI model itself?

AIP allows users to interact with their company's ontology through prompts, similar to interacting with a chatbot. It supports any third-party large language model and enables enterprises to set rules and guardrails, adding real business value without creating generative AI models.

What factors contribute to the acceleration of Palante's commercial revenue growth?

Factors include the adoption of AIP boot camps, which facilitate rapid implementation of AI solutions, and a shift in market strategy that targets a wide range of industries, leading to an increase in commercial customer accounts.

Why does the video suggest that investors interested in AI should consider Microsoft instead of Palante?

The video suggests that Microsoft is a better investment due to their leadership in generative AI software and their partnership with OpenAI, positioning them to benefit more from the AI trend compared to Palante.

What is the current position of Palante on the creator's list of stocks to get rich without getting lucky, and why?

Palante has moved up to a higher position on the list due to its proven ability to lower the barrier to AI adoption across various industries and the effectiveness of its AIP boot camps, despite initial skepticism.