- Underwriter
- Posts
- 📈 $PLTR: Down 20% - Is This AI Giant Still Worth Watching?
📈 $PLTR: Down 20% - Is This AI Giant Still Worth Watching?
Palantir soars 340% in 2024, then drops 20% - What's driving this AI giant's wild ride and can its strong growth maintain the momentum? 🎢
Top of the top lads!
Featured Stock of the Week
A note that neither Underwriter nor this newsletter provides investing or trading advice. Please consult with a financial professional before making investment decisions. By reading, you agree to not take this as financial advice and assume all risk.
PLTR: PLTR $67.26
This week, we're diving into Palantir Technologies, an AI powerhouse that's been making waves in the market. Despite being one of 2024's best performers with a stunning 340% gain, the stock has recently pulled back about 20% from its all-time high of $84.80.
Let's break down what's happening with this data analytics champion and why it matters for investors.
Strong Commercial Growth and Profitability
Palantir's growth story continues to impress, with Q3 revenue climbing 30% year-over-year to $726 million. Their U.S. commercial revenue surged 54% to $179 million, driven by their AI Platform (AIP). The company has also achieved a significant milestone in profitability, with a 20% net margin and an operating margin expanding to 38% from 29% in the prior year. This demonstrates Palantir's ability to scale efficiently while maintaining strong growth. Most notably, they've grown their U.S. commercial customer base to 321 clients, a 77% year-over-year increase. This rapid expansion, coupled with 104 new deals valued at over $1 million each in Q3, showcases the growing market confidence in Palantir's AI solutions. |  |
Strategic Government Partnerships
While commercial growth accelerates, Palantir's government business remains robust. U.S. government revenue increased 40% year-over-year to $320 million in Q3. The company recently secured a $400.7 million contract extension with the U.S. Army and received FedRAMP High Authorization for handling sensitive government data. Additionally, Palantir formed strategic partnerships with space companies Voyager Space and Starlab Space in 2024, aiming to leverage their AI capabilities in space technology. The company has also announced partnerships with major players like Amazon Web Services and Anthropic to provide U.S. intelligence and defense agencies access to Claude 3 AI models, further strengthening their position in the government sector. |  |
Recent Market Pressures
Palantir's stock has retreated about 20% from its December high of $84.80, primarily due to valuation concerns. After the stock's impressive 340% rise in 2024, some major investors like ARK Investment Management have started taking profits, contributing to the recent decline. The key debate centers around Palantir's future growth potential versus its current stock price. While the company is performing strongly with increasing revenue and customer growth, its stock trades at much higher valuations compared to other software companies. For context, Palantir trades at 228 times forward earnings, while many of its peers trade at much lower multiples. Despite these short-term pressures, Palantir's recent addition to both the S&P 500 and Nasdaq-100 indices could provide long-term support for the stock, as more institutional investors and index funds will need to include it in their portfolios. |  |
Major Market News
Source: DALL-E
Wednesday, January 15th - Consumer Price Index (CPI)
What: The CPI measures changes in the average prices of consumer goods and services, serving as the primary gauge of inflation in the U.S. economy.
Impact: December's CPI showed a 0.3% monthly increase and 2.9% annual rise, slightly above expectations. Core CPI, which excludes volatile food and energy prices, rose 0.2% monthly and 3.3% annually. This data is crucial for Fed policy decisions and market expectations about interest rates.
Source: Bureau of Labor Statistics
Stocks this may impact the most:
Wednesday, January 15th - Fed Official Speeches
What: Several Fed officials are scheduled to speak, including Presidents Williams (NY), Barkin (Richmond), and Goolsbee (Chicago)
Impact: These speeches provide crucial insights into Fed thinking about monetary policy, inflation trends, and economic conditions. Markets closely monitor these for clues about future interest rate decisions.
Source: Federal Reserve
Stocks this may impact the most:
Thursday, January 16th - Initial Jobless Claims
What: Weekly report showing the number of Americans filing first-time claims for unemployment benefits
Impact: Claims rose to 210,000, higher than the previous week's 201,000, but still indicate a relatively strong labor market. The job market's resilience is a key factor in the Fed's monetary policy decisions.
Source: Department of Labor
Stocks this may impact the most:
Your Stock Research Copilot
AI Powered
At a glance info
Built for decision making
A note that Underwriter and this newsletter is not investing or trading advice. These are stocks and information we find interesting. Please consult with a financial professional. By reading, you agree to not take this as financial advice and assume all risk. Futures, stocks, bonds trading of any kind involves a lot of risk. No guarantee of profit is made. In fact, you may lose your entire investment. We guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. Reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are the courtesy of Underwriter. The data, quotes and information used in this blog is from publicly available sources and could be outdated or outright wrong - I do not guarantee accuracy of this information.