Palantir: Beware I’m more cautious.. do this.

Summary

The video script discusses Palantir's Q2 revenue growth and suggests that it may be too late to buy the stock at over $30 per share. The speaker advocates for a logical investment approach, highlighting the benefits of selling put options as a consistent income strategy. They provide examples of selling put options on stocks like Apple and Palantir, emphasizing the importance of choosing stocks one is willing to own and those with good support levels. The script also advises on managing put options and finding stocks with tight bid-ask spreads for better trading opportunities.

Takeaways

• 📈 Paler's Q2 revenue was $678 million, a 27% increase from the same period last year, showing an improvement over the 21% growth in Q1.
• 🔑 Paler's expected revenue for the first quarter is around $699 million, which is slightly above the $681 million consensus estimate.
• 📊 The company has raised its full-year revenue guidance by 2% to nearly $2.75 billion, indicating a 23% topline increase for the year.
• 💡 The rapid adoption of Paler's AI platform by commercial customers has already occurred, suggesting that future growth may be different from past trends.
• 💰 Paler anticipates a 47% increase in revenue from US commercial customers to over $672 million this year.
• 🤔 The speaker questions whether over $30 per share is a profitable entry point for Paler stock, hinting at potential overvaluation.
• 📊 The speaker prefers not to chase stocks, including Paler, regardless of the business's quality, advocating for a logical investment approach.
• 👥 Insiders from Paler have shared that some employees prefer using PowerBI and Power Apps over Paler for building apps, suggesting competition in the market.
• 📈 The speaker is bullish on Paler but suggests using put options to enter the stock at a cheaper price than $30.
• 💡 Selling put options is presented as a consistent income strategy, allowing investors to buy stocks at lower prices than current market rates.
• 💼 The speaker emphasizes the importance of selecting stocks for put options that one would want to own, particularly those with good support levels.
• 📉 The strategy involves selling put options with a strike price below the current stock price, collecting income, and potentially owning the stock at a lower price if assigned.

Q & A

What was Palantir's Q2 revenue and how does it compare to the same period last year?

Palantir's Q2 revenue was $678 million, which represents a 27% increase from the same period last year.

How does Palantir's Q2 revenue growth compare to its Q1 growth in the same year?

Palantir's Q2 revenue growth of 27% was an improvement over the 21% growth it reported in Q1 of the same year.

What is Palantir's expected revenue for the first quarter at the midpoint of its guidance range?

Palantir expects its revenue to be about $699 million in the first quarter at the midpoint of its guidance range.

What is the consensus estimate for Palantir's revenue from the same period last year, and how does it compare to the expected improvement?

The consensus estimate for Palantir's revenue is $681 million, which is slightly below the expected improvement of 25% from the same period last year.

What is Palantir's full-year revenue guidance, and how does it reflect the company's growth outlook?

Palantir has raised its full-year revenue guidance by 2% from the prior range to almost $2.75 billion, indicating a projected topline increase of 23% for the year.

What is the expected growth rate for Palantir's revenue from commercial customers in the US for the current year?

Palantir is expecting its revenue from commercial customers in the US to increase by 47% in the current year.

Why might the speaker question whether over $30 per share is a profitable price to enter the stock?

The speaker questions the profitability of entering the stock at over $30 per share due to the rapid adoption of Palantir's AI platform by commercial customers, which may have already occurred, implying that the growth may be priced in.

What alternative strategy does the speaker suggest for entering the stock instead of buying it outright?

The speaker suggests using put options to enter the stock at a cheaper price than $30, as a way to potentially acquire shares at a lower cost.

What is the speaker's view on selling put options as an income strategy?

The speaker considers selling put options to be the most consistent income strategy, as it allows for buying stocks at prices lower than their current trading value.

What is the key consideration when choosing a stock to sell put options on?

The key consideration is to choose a stock that you would want to own, preferably one with good support levels and that has already trended down to a level where it's unlikely to go much lower.

How does the speaker define a 'good support' level for a stock when selling put options?

A 'good support' level is defined as a price point where the stock has bottomed out and is showing signs of stability or a bounce back, making it less likely to fall further.

What is the recommended approach for managing a sold put option?

The recommended approach is to wait until expiration. If the option is out of the money, the seller keeps the premium. If assigned, the seller can either hold the shares for long-term or generate income through other strategies like covered calls.

Why is liquidity important when choosing an option to sell?

Liquidity is important because it affects the bid-ask spread. A tight spread means less loss on the transaction, making it more profitable for the seller.

What is the significance of the Delta value when selling put options?

The Delta value represents the probability of the option being in the money at expiration. A lower Delta means a higher chance the option will expire out of the money, which is favorable for the seller.

How does the speaker view the potential of making 1% per week by selling put options?

The speaker views 1% per week as a realistic and conservative goal for selling put options, acknowledging that in a bull market or with other strategies, higher returns are possible.