Now, Palantir (PLTR +0.64%), a name that trips rather nicely off the tongue, has been having a positively ripping good time of it these past few years. A rise of over 2,200% since 2023, you understand, is not to be sneezed at. Though, naturally, after such a spirited dash upwards, it’s taken a bit of a breather – a decline of 25% from its peak in October. But, like a well-bred terrier, it’s rallied in recent weeks, having previously been down 40%. One is left to ponder, doesn’t one, whether this is a continuation of the upward trajectory, or merely a fleeting alignment with the general market exuberance?
Palantir’s Rather Clever Turn of Phrase
The firm, you see, possesses a software platform that employs artificial intelligence – a dashedly clever bit of code, what! – to sift through vast quantities of data with remarkable speed. The result? Decision-makers are presented with guidance so timely and precise it’s practically clairvoyant. Originally, this was the purview of governmental bodies – intelligence gathering and military operations, you understand – but the company has, with commendable enterprise, expanded into the commercial sector, where it’s found a rather enthusiastic reception, particularly stateside.
The growth figures are, frankly, rather astonishing. Revenue climbed a full 70% year-over-year in the last fiscal quarter, reaching $1.4 billion. Commercial revenue, at an 82% pace, is outpacing even government revenue growth of 60% – both numbers being, shall we say, most agreeable. The star performer, predictably, is the U.S. commercial segment, which soared a remarkable 137% to $507 million. And the customer count? A respectable 571 U.S. commercial clients, which, while not exactly a teeming multitude, represents a promising start, considering the ocean of potential customers out there.
One struggles to find fault with these results; they are, to put it mildly, most impressive. The sticking point for many investors, however, is the valuation. Trading at a rather eye-watering 116 times forward earnings, Palantir is, shall we say, a bit on the pricey side. A considerable amount of future growth appears to be already factored into the share price, leaving one wondering if there’s much juice left in the orange.
For comparison, Nvidia, which managed a respectable 73% revenue increase in its recent fiscal quarter, trades at a mere 22 times forward earnings. So, to acquire Palantir shares, one must pay approximately five times the price of Nvidia. A rather significant difference, wouldn’t you agree?
Is it worth it, though? That is the question.
Personally, I rather think not. The stock price seems to be anticipating several years of uninterrupted growth, and there are, frankly, more attractive options available – Nvidia springs immediately to mind. If Palantir manages to maintain its current growth rate for an extended period, today’s price might ultimately prove justified. However, the stock would need to tread water for a good many years, even amidst rapid business expansion, to return to a more conventional valuation. A rather optimistic outcome, and one I’m not inclined to wager on.
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2026-03-11 18:12