Investing in the Absurd: A Contrarian View on Tech Stocks

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Ah, September-a month which, like a dancing bear, stumbles unsteadily across the stage of economic analysis. Here in postmodern America, we witness our economy languishing in a curious malaise, with job growth resembling just a paltry 22,000 souls added to the labor force in August 2025. Inflation, that uninvited guest at the feast of financial optimism, has audaciously climbed to 2.9% on a year-over-year basis, up from a mere 2.7% in July. Yet, as if engaged in some perverse game of poker, Wall Street dares to predict that the Federal Reserve shall soon prioritize the lassitude of economic growth, loosening the reins of interest rates. Tell me, is there a greater folly than believing in the moral superiority of lowered borrowing costs for the sake of fostering high-growth technology stocks?

For the discerning contrarian, the proposition arises: should one aloofly regard their $5,000-a sum untainted by life’s pressing obligations-as an opportunity for investment? Perhaps indulging in the peculiar delights of two illustrious tech stocks might just be the affronting act of rebellion we require in these uncertain times.

1. Palantir Technologies

Palantir (PLTR), an unintentional purveyor of enterprise AI software, finds itself tilting at windmills as it aids corporations in assembling their production-grade AI contraptions-rather like a sagacious architect designing a grand edifice only to watch it collapse under its own hubris. The company’s acceleration, resembling a headlong rush of sapience, hints at its increasing importance to enterprises of varying degrees of intelligence.

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The latest figures are staggering, if only in their comedy of excess: Palantir reported a ridiculous 48% growth in revenue compared to the previous year, amassing over $1 billion in the process. Their adjusted operating margin-a delightful 46%-bears testament to the absurdities of contemporary capitalism, while a healthy $569 million sits idle as adjusted free cash flow.

The U.S. market, that unpredictable flirt, has been particularly kind, with second-quarter revenues from this territory climbing a commendable 68% year over year to $733 million. What irony, for a company whose origins can be traced back to nefarious government contracts, now finds its commercial revenues ensnaring the gaze of a burgeoning clientele-93% growth to $306 million! Meanwhile, those government contracts, those nostalgic vestiges of yore, remain lucrative at $426 million-an upswing of 53%.

Palantir’s prowess goes beyond mere financial gymnastics; its audacious Artificial Intelligence Platform, existentially asserting itself as the operating system for enterprise AI, has become a siren call for firms tired of fumbling in the digital abyss. No longer merely cobbling together generic components, clients now clamor for Palantir’s bespoke ready-made blocks, hastening their attempts to birth AI-assisted applications into a world already drowning in frivolity.

The newly minted AI Function-Driven Engineering capability within this platform promises to usher in a new era-a move so grand that one might almost believe it to be godlike. Clients, those eternally hopeful mortals, are now capable of entrusting the mundane tasks of ontology editing and data manipulation to a soulless machine, watching in alarming delight as order emerges from chaos.

But let us not be misled by Palantir’s abundant advantages. With a price-to-earnings ratio standing at a staggering 277 times forward earnings, it is hard to ignore the sheer folly of such a valuation. Such absurdity might evoke memories of tech giants past, like Amazon and Alphabet (GOOG) (GOOGL), who too danced dangerously close to the sun before securing enviable dividends for long-suffering investors. Yet, one must ponder whether the echo of that history will serve as a cruel reminder or a benevolent guide.

2. Alphabet

And what of Alphabet, that omnipresent deity of the digital world? While it steadfastly holds dominion over search engines and streaming video, the company has now loftily directed its gaze toward the horizon of AI. With faces as inscrutable as sphinxes and coffers swelling with illimitable wealth, Alphabet is perilously investing in the arcane arts of AI infrastructure. They appear determined to birth forth the next chapter of their empire.

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In the second quarter of fiscal 2025, as if divining a cruel jest, Alphabet reported a 14% increase in revenues, culminating in a staggering $96.4 billion, with net income rising to an audacious $28.2 billion-a comical uptick of 19%. Clearly, this is an institution still buoyed by the seductive allure of its cash flows, which totaled $66.7 billion for the preceding twelve months. It is an establishment in rude health, yet utterly beguiled by the temptations of AI and cloud innovations.

Consider Google Cloud-an illicit dream turned lucrative affair, now clutching 13% of the global cloud market. It reached a runaway annualized run rate of $50 billion; even caddish business practices have their rewards. With an operating margin increasing from 11.3% to a jaw-dropping 20.7%, Alphabet seems poised for a shimmering future, notwithstanding the underlying chaos. Its backlog-a pipeline of contracted revenue-has ballooned to an impressive $106 billion, lending an air of solid confidence for those willing to place their bets.

The audacity of Alphabet’s AI endeavor cannot be overstated. Their approach is grand, integrating everything from cutting-edge TPU technology to esoteric AI models, fortified by a web of optimized data centers, all of which combine to create a veritable fortress of innovation. Their initiative to imbue Google Search with AI capabilities has already paid dividends, manipulating user experiences in such a way as to keep the young and the restless increasingly glued to their screens.

Yet, in true form, Alphabet dares to invest lavishly in its infrastructure, driven by an insatiable demand that threatens to belch forth its profits. Although immediate depreciation may raise specters of increased costs, the promise of future efficiencies is tantalizingly close-much like a raindrop on the cusp of falling from a varied ceiling.

At nearly 26 times earnings, Alphabet’s valuation dances on the perilous edge of what some may deem reasonable. Nevertheless, for discerning long-term investors, the amalgam of breadth, cash generation capabilities, and strategic AI moats render this a compelling proposition-if indeed one still has the appetite for the absurdity that this current moment presents.

Investing-as any contrarian will tell you-is ultimately a reflection of one’s capacity for absurdity. 🌪️

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2025-09-18 22:57