Palantir: A Most Interesting Proposition

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Palantir Technologies

Now, Palantir Technologies, a name that trips rather nicely off the tongue, has been causing a bit of a stir amongst us devotees of the market. It seems those who had the foresight to invest in the early days of this artificial intelligence brouhaha are currently doing a jolly good bit of celebrating. The shares, you see, have climbed a positively dizzying 1,200% over the last three years – a performance that would make even the most hardened City gent raise an eyebrow. Investors, it appears, have been rather impressed with the company’s consistent earnings growth and encouraging pronouncements regarding ongoing demand. A most satisfactory state of affairs, wouldn’t you agree?

However, a slight wrinkle has presented itself. The valuation, you see, has been soaring to heights that might give a more cautious investor the vapors. This has kept a few potential buyers at bay, and even prompted some existing shareholders to consider a hasty retreat, fearing a slump in demand. A bit of a pickle, really. It’s always the way, isn’t it? Just when things seem to be going swimmingly, a little cloud appears on the horizon.

This has, naturally, had a dampening effect on the stock’s performance of late, with a slide of around 25% since the start of the year. But a silver lining, as it were, is that this decline has also brought the valuation down a notch or two. The question is, then: is Palantir stock a buy at this juncture? Let’s have a bit of a look-see, shall we?

Palantir’s Data Expertise

First, a brief word on what Palantir actually does. They sell software systems, you see, that gather a customer’s data and help them make sense of it – a bit like a particularly efficient butler sorting through a mountain of correspondence. This might involve quickly adjusting tactics on the battlefield, or reorganizing a restaurant’s workflows to maximize efficiency. Their clientele is a rather diverse bunch, encompassing both governments and commercial enterprises.

And all these customers are particularly enamored with their AI-based platform, rather cleverly named Artificial Intelligence Platform (AIP). Launched in 2023, this platform has been supercharging growth, offering a fast and easy way to apply AI to their needs. It also saves them a good deal of money, as they needn’t bother investing in the building blocks of an AI platform themselves. A dashedly clever bit of code, what!

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Strong Commercial and Government Businesses

Palantir has delivered quite respectable double-digit revenue growth, thanks to gains in both its commercial and government businesses, and profit has been climbing along nicely. The trends in the commercial business are particularly interesting, as this was a rather small part of revenue just a few years ago. They’ve grown their number of U.S. commercial customers from a mere handful (under 20, if you please) about five years ago to over 500 today. And the contract value has advanced significantly. In the latest quarter, they closed a record level of U.S. commercial contract value – over $1.3 billion, a 67% increase from a year earlier. Remarkable, really.

So, things are looking rather bright for Palantir. But is now a propitious moment to buy? Today, Palantir remains a bit on the pricey side, admittedly, but its valuation has dropped a good deal. It’s a bit like a particularly fine port – expensive, certainly, but well worth the investment if you have the funds.

Palantir Valuation Chart

It’s impossible to predict whether Palantir’s stock will decline further, pushing the valuation to even lower levels. But attempting to time the market is a fool’s errand, wouldn’t you agree? It’s far better to focus on the company’s long-term prospects. And from that angle, Palantir’s story looks decidedly positive. All of which means that growth investors who buy Palantir at today’s level may well score a win over the years to come. A most satisfactory outcome, indeed!

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2026-02-18 13:12