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01-16
Hallo
Palantir: Great Business At A Wrong Price - I Sold My Shares
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Palantir serves mostly US customers (66% of revenue). During Q1-Q3 2024, it served nearly 630 customers (vs. 453 in the previous year).</p><p>Palantir was founded over 20 years ago (2003) with an aim to facilitate US counterterrorism operations. Since then, it's been focusing on the public sector and serves various government bodies across the world, but it has also expanded to the commercial sector within which large businesses often face similar struggles when it comes to data:</p><blockquote><p>For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond. Foundry is becoming a central operating system not only for individual institutions but also for entire industries. Apollo, which we began offering as a commercial solution in 2021, is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Apollo allows our customers to run their software in virtually any environment.</p></blockquote><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/893f2de122cd5efcf5893a7ce73380fd\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"491\"/><span>Data by YCharts</span></p><p>Over the first two years of PLTR's trading history, its market cap jumped as high as $60B, quickly retracted to ~$40–50B and later came crashing down to ~$15–20B range that lasted until Q1 2023. However...</p><h2 id=\"id_904035619\">Palantir Turned The Tables In 2023</h2><p>In 2023, Palantir joined forces with the ongoing and accelerating AI revolution driven by the likes of NVIDIA (NVDA), Microsoft (MSFT), OpenAI, Amazon (AMZN), Meta (META), etc. However, the result of Palantir's involvement in the AI very much differs from the abovementioned entities.</p><p>While NVIDIA facilitates the revolution with its state-of-the-art hardware, META increases the performance of marketing campaigns on its platforms, and AMZN with MSFT integrates AI-driven solutions to their existing products (AWS or Azure / Copilot), Palantir expanded its product offering with another platform—Artificial Intelligence Platform (AIP):</p><blockquote><p>AIP enables responsible AI-advantage across the enterprise by using primary, core components built to effectively activate LLMs and other AI within any organization. It provides unified access to open-source, self-hosted, and commercial LLMs that can transform structured and unstructured data into LLM-understandable objects and can turn organizations' actions and processes into tools for humans and LLM-driven agents. AIP can allow organizations to power operational use of AI and LLMs with interfaces for decision making, feedback, and safe hand-off among AI agents and human operators with wide-spectrum security and audit controls, which allow for granular control over model usage and integrated human review checkpoints throughout the workflows. AIP is designed to be seamlessly bundled with existing Palantir offerings such as the Foundry, Gotham, and Apollo platforms.</p></blockquote><p>The fact that AIP is easily integrated with Palantir's other platforms largely facilitated the deployment process and enabled cross-sell opportunities to its existing clients. With Palantir's sales & marketing efforts oriented around discussions with its clients, the Company has always been solution-oriented and aimed its platforms to respond to specific challenges faced by government bodies/large enterprises. That approach was also adopted at the early deployment stages of AIP, as Palantir held boot camps related to AIP, so its customers could witness first-hand the solution they were waiting for. Especially as most of Palantir's customers are risk-averse, with several cases of investing millions (or billions in some instances) in solutions that were never adopted.</p><p>With the 'quite a successful' adoption of AIP, many investors already saw their window of opportunity. Palantir was (and I believe still is) accompanied by outstanding value drivers, which I cannot stress enough:</p><ul style=\"\"><li><p>A long-standing facilitation of public and commercial customers with increasing share of the commercial segment proves the top-tier quality of Palantir's platforms.</p></li><li><p>Palantir doesn't really have strong competitors and is far ahead of its 'peers'.</p></li><li><p>Palantir showcased one of the most successful ways of monetizing the ongoing AI revolution.</p></li><li><p>Software-oriented business model, reflecting the scalability of its platforms across the dynamically increasing group of customers with high cross-sell and up-sell potential.</p></li></ul><p>The market recognised the abovementioned value drivers. I myself was lucky enough to establish a relatively large position in Palantir at an average cost of ~$10 per share during the first half of 2023. I made a few additions along the way, but I stopped increasing my position once the stock price exceeded $25 per share, as Palantir's share in my portfolio started to exceed my comfort level (I'm a big advocate of diversification and saw too many ugly situations resulting from high concentration—whether in terms of portfolio or business performance).</p><p>When I was buying Palantir, I expected a solid upside and believed I would stick with the business for a long time. However, as its valuation recorded a completely outstanding growth in 2024, my primary assumption couldn't hold true—leading us to the next point.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/4b9994389a97250ba8ffd3d6aa1037ef\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"491\"/><span>Data by YCharts</span></p><h2 id=\"id_3518363501\">This Week, I Sold All My Shares At ~$75 Per Share</h2><p>I feel it's appropriate to reserve a brief passage of my approach to investing to shed light on the rationale behind my exit from Palantir. I'm an M&A advisor (a fancy name for advising on buying and selling businesses) and an advocate of the timeless wisdom of investing legends such as Benjamin Graham or Warren Buffett. I tend to focus on the margin of safety, risk-to-reward profile, diversification, and often engage in income-producing businesses.</p><p>However, I'm also a technological enthusiast with a particular interest in the ongoing AI revolution with established positions in leading players (MSFT, NVDA, AMZN, META, and until a few days ago... Palantir).</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/0b3e6fdbaae97f86f240335ddb2693e1\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"636\" tg-height=\"704\"/><span>Seeking Alpha</span></p><p>To put it briefly, I lost comfort with holding on to Palantir at these prices. Its share in my portfolio reached a concerning level even though I stopped adding at the beginning of 2024.</p><p>It no longer provides investors with the margin of safety it used to, and I wouldn't feel comfortable with advising anybody on buying Palantir at these prices at the current stage of the business development. Before we jump to conclusions, let me state a few things.</p><p><strong>Yes</strong>, I believe Palantir is uniquely positioned to be a major technological player and has tremendous growth prospects ahead.</p><p><strong>No,</strong> I don't share the common belief that its growth is decelerating.</p><p><strong>However,</strong> even with upheld growth—I don't consider Palantir a $150B+ business (yet). It has quite a long way to go until it grows into its valuation. Please review the table and chart below, presenting Palantir's P/S ratio estimated through its current valuation and consensus sales estimated for the upcoming years.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/5426fecdf2b8d0a5e04c96f1cf43c065\" alt=\"Author\" title=\"Author\" tg-width=\"640\" tg-height=\"351\"/><span>Author</span></p><p>Please note that the projected sales revenue growth is pretty much in line with Palantir's growth history during the last several quarters.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8bc1b6d1f231160085205a5b36c70ad7\" alt=\"Palantir's Q3 Earnings Presentation\" title=\"Palantir's Q3 Earnings Presentation\" tg-width=\"640\" tg-height=\"161\"/><span>Palantir's Q3 Earnings Presentation</span></p><p>For reference, as some may expect higher growth in the upcoming years, let's assume the highest y/o/y growth ratio Palantir experienced as our base scenario for 2025 and beyond.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/249d080814bfeac0c6b7243cf59b548a\" alt=\"Author\" title=\"Author\" tg-width=\"640\" tg-height=\"367\"/><span>Author</span></p><p>And now, let's take a look at some of the leaders in their respective fields, facilitating the AI revolution and the technological trends adopted worldwide: NVDA, MSFT, and META. Similarly, we took their current valuation and divided it by consensus sales estimates for the upcoming years.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9d8a68271dc55d4235578638b92f689d\" alt=\"Author\" title=\"Author\" tg-width=\"640\" tg-height=\"248\"/><span>Author</span></p><p><strong>Conclusion:</strong> Even though the abovementioned businesses <em>DO NOT COMPARE</em> to Palantir and are at <em>VERY DIFFERENT GROWTH STAGES</em> as Palantir has a dynamic growth path ahead, I don't believe it justifies its current valuation—let's remember that each presented business holds leadership, well-established, and still growing position. Should Palantir deliver the expected growth metrics, it will certainly grow into its current valuation, but the place where the business is right now and the growth expectations set ahead don't leave much room for future upside from buying Palantir right now.</p><p>To put it frankly, I can't uphold a bullish outlook and expectations of meaningful upside potential for a business generating $2.8B in sales (even accounting for 20–30% growth prospects) valued at $150–160B.</p><p>I expect a downward movement from current levels and will certainly consider establishing my position once again, but for now—it was a time for me to take profits. I'm aware of the large following of Palantir, and it doesn't surprise me—the business is set to record incredible performance in the upcoming years. However, business development is one thing and the price you pay for it is another.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/329c2429e2ecf3e8466feeda7e82ae6c\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"527\" tg-height=\"252\"/><span>Seeking Alpha</span></p><p>For further reference, Wall Street Analysts expect very limited upside potential with the highest price target of $80 per share, an average of $45 (implying over 32% downside risk), and the lowest one (completely detached from Palantir's potential in my view—overly pessimistic) at $11 per share.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/82d7a1004c95483aabe93f1d4b37fc26\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"640\" tg-height=\"190\"/><span>Seeking Alpha</span></p><p>It's also worth mentioning that more bearish voices have been raised recently, with Ark Invest unloading over 196 thousand shares and Morgan Stanley (MS) initiating its coverage with a price target of $60 per share.</p><h2 id=\"id_26700235\">The Bottom Line</h2><p>For transparency, I first established my position in Palantir at the beginning of 2023. It was quite large, and after I added a few times, I stopped reinvesting once the stock price increased over $25 per share at the beginning of 2024 as Palantir's share in my portfolio started to exceed my comfort level. My final average cost basis amounted to ~$11.6 per share (including several additions) and this week, I decided to sell all my shares at ~$75 per share.</p><p>As Benjamin Graham likes to portray with its wonderful 'Mr Market' metaphor, the market often gets overenthusiastic with dynamically growing businesses, leading to valuation detached from fundamentals and growth prospects.</p><p>With all the respect to Palantir's outstanding team capable of creating great platforms serving leading institutions and businesses globally and tremendous growth potential, I consider its valuation detached from fundamentals and growth prospects. Palantir still has much business development to achieve until it grows into its current ~$150–160B valuation. I will follow Palantir closely and look forward to establishing another position at a different stage of its development.</p><p>I recognise numerous authors and analysts expressing continuous optimism and appreciation of Palantir's achievements. I share the appreciation, but as 'each to their own'—I can't share the expectations of the upside potential justifying the risk accompanying investing in any business generating ~2.8B of sales at over $150B valuation (even with 20–30% growth rates for the upcoming years).</p><h4 id=\"id_1997545293\">Other Considerations</h4><p>Please note that I haven't established a short position in Palantir. I sold my shares and currently have no position in the Company. Should you be willing to take a step further than selling your currently owned shares and short the stock, please keep in mind that it may require deep pockets and expose you to additional risk factors.</p><p>Regarding Palantir's devoted bulls, please keep in mind that the stock price volatility and overvaluation are not sole risk factors accompanying Palantir, as it also has exposure to:</p><ul style=\"\"><li><p>Uncertainty regarding interest rate changes and their impact on the market as a whole.</p></li><li><p>Risk of other players entering the market and creating a competitive environment.</p></li><li><p>Uncertainty regarding the state of the economy and geopolitical tensions.</p></li><li><p>Risk of being unable to deliver solutions/updates/errors fixed in a timely and sufficient manner within the ever-changing technological space.</p></li></ul><p>Should you be willing to hold on to your shares or invest in Palantir—please make sure not to put all your eggs into one basket—diversification is key, especially within such volatile industries.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir: Great Business At A Wrong Price - I Sold My Shares\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-16 22:00 GMT+8 <a href=https://seekingalpha.com/article/4749799-palantir-great-business-at-wrong-price-sold-my-shares><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryPalantir is a leading player in monetizing the AI revolution, serving nearly 630 customers consisting of large public and commercial organisations globally (mainly in the US).Founded in 2003, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4749799-palantir-great-business-at-wrong-price-sold-my-shares\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4749799-palantir-great-business-at-wrong-price-sold-my-shares","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1164318115","content_text":"SummaryPalantir is a leading player in monetizing the AI revolution, serving nearly 630 customers consisting of large public and commercial organisations globally (mainly in the US).Founded in 2003, the Company initially focused on the public sector but has expanded to commercial sectors facing similar challenges.PLTR reached a pivotal point early in 2023, when I first established my position, due to a successful deployment of the artificial intelligence platform showcasing tremendous cross-sell and growth potential.Within this article, I explained my rationale behind selling all my shares at an average price of ~$75 per share despite the deep respect for Palantir's team and its achievements.bunhillPalantir (NASDAQ:PLTR) is an upcoming star and one of the best businesses when it comes to the capabilities of monetizing the AI revolution. Palantir serves mostly US customers (66% of revenue). During Q1-Q3 2024, it served nearly 630 customers (vs. 453 in the previous year).Palantir was founded over 20 years ago (2003) with an aim to facilitate US counterterrorism operations. Since then, it's been focusing on the public sector and serves various government bodies across the world, but it has also expanded to the commercial sector within which large businesses often face similar struggles when it comes to data:For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond. Foundry is becoming a central operating system not only for individual institutions but also for entire industries. Apollo, which we began offering as a commercial solution in 2021, is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Apollo allows our customers to run their software in virtually any environment.Data by YChartsOver the first two years of PLTR's trading history, its market cap jumped as high as $60B, quickly retracted to ~$40–50B and later came crashing down to ~$15–20B range that lasted until Q1 2023. However...Palantir Turned The Tables In 2023In 2023, Palantir joined forces with the ongoing and accelerating AI revolution driven by the likes of NVIDIA (NVDA), Microsoft (MSFT), OpenAI, Amazon (AMZN), Meta (META), etc. However, the result of Palantir's involvement in the AI very much differs from the abovementioned entities.While NVIDIA facilitates the revolution with its state-of-the-art hardware, META increases the performance of marketing campaigns on its platforms, and AMZN with MSFT integrates AI-driven solutions to their existing products (AWS or Azure / Copilot), Palantir expanded its product offering with another platform—Artificial Intelligence Platform (AIP):AIP enables responsible AI-advantage across the enterprise by using primary, core components built to effectively activate LLMs and other AI within any organization. It provides unified access to open-source, self-hosted, and commercial LLMs that can transform structured and unstructured data into LLM-understandable objects and can turn organizations' actions and processes into tools for humans and LLM-driven agents. AIP can allow organizations to power operational use of AI and LLMs with interfaces for decision making, feedback, and safe hand-off among AI agents and human operators with wide-spectrum security and audit controls, which allow for granular control over model usage and integrated human review checkpoints throughout the workflows. AIP is designed to be seamlessly bundled with existing Palantir offerings such as the Foundry, Gotham, and Apollo platforms.The fact that AIP is easily integrated with Palantir's other platforms largely facilitated the deployment process and enabled cross-sell opportunities to its existing clients. With Palantir's sales & marketing efforts oriented around discussions with its clients, the Company has always been solution-oriented and aimed its platforms to respond to specific challenges faced by government bodies/large enterprises. That approach was also adopted at the early deployment stages of AIP, as Palantir held boot camps related to AIP, so its customers could witness first-hand the solution they were waiting for. Especially as most of Palantir's customers are risk-averse, with several cases of investing millions (or billions in some instances) in solutions that were never adopted.With the 'quite a successful' adoption of AIP, many investors already saw their window of opportunity. Palantir was (and I believe still is) accompanied by outstanding value drivers, which I cannot stress enough:A long-standing facilitation of public and commercial customers with increasing share of the commercial segment proves the top-tier quality of Palantir's platforms.Palantir doesn't really have strong competitors and is far ahead of its 'peers'.Palantir showcased one of the most successful ways of monetizing the ongoing AI revolution.Software-oriented business model, reflecting the scalability of its platforms across the dynamically increasing group of customers with high cross-sell and up-sell potential.The market recognised the abovementioned value drivers. I myself was lucky enough to establish a relatively large position in Palantir at an average cost of ~$10 per share during the first half of 2023. I made a few additions along the way, but I stopped increasing my position once the stock price exceeded $25 per share, as Palantir's share in my portfolio started to exceed my comfort level (I'm a big advocate of diversification and saw too many ugly situations resulting from high concentration—whether in terms of portfolio or business performance).When I was buying Palantir, I expected a solid upside and believed I would stick with the business for a long time. However, as its valuation recorded a completely outstanding growth in 2024, my primary assumption couldn't hold true—leading us to the next point.Data by YChartsThis Week, I Sold All My Shares At ~$75 Per ShareI feel it's appropriate to reserve a brief passage of my approach to investing to shed light on the rationale behind my exit from Palantir. I'm an M&A advisor (a fancy name for advising on buying and selling businesses) and an advocate of the timeless wisdom of investing legends such as Benjamin Graham or Warren Buffett. I tend to focus on the margin of safety, risk-to-reward profile, diversification, and often engage in income-producing businesses.However, I'm also a technological enthusiast with a particular interest in the ongoing AI revolution with established positions in leading players (MSFT, NVDA, AMZN, META, and until a few days ago... Palantir).Seeking AlphaTo put it briefly, I lost comfort with holding on to Palantir at these prices. Its share in my portfolio reached a concerning level even though I stopped adding at the beginning of 2024.It no longer provides investors with the margin of safety it used to, and I wouldn't feel comfortable with advising anybody on buying Palantir at these prices at the current stage of the business development. Before we jump to conclusions, let me state a few things.Yes, I believe Palantir is uniquely positioned to be a major technological player and has tremendous growth prospects ahead.No, I don't share the common belief that its growth is decelerating.However, even with upheld growth—I don't consider Palantir a $150B+ business (yet). It has quite a long way to go until it grows into its valuation. Please review the table and chart below, presenting Palantir's P/S ratio estimated through its current valuation and consensus sales estimated for the upcoming years.AuthorPlease note that the projected sales revenue growth is pretty much in line with Palantir's growth history during the last several quarters.Palantir's Q3 Earnings PresentationFor reference, as some may expect higher growth in the upcoming years, let's assume the highest y/o/y growth ratio Palantir experienced as our base scenario for 2025 and beyond.AuthorAnd now, let's take a look at some of the leaders in their respective fields, facilitating the AI revolution and the technological trends adopted worldwide: NVDA, MSFT, and META. Similarly, we took their current valuation and divided it by consensus sales estimates for the upcoming years.AuthorConclusion: Even though the abovementioned businesses DO NOT COMPARE to Palantir and are at VERY DIFFERENT GROWTH STAGES as Palantir has a dynamic growth path ahead, I don't believe it justifies its current valuation—let's remember that each presented business holds leadership, well-established, and still growing position. Should Palantir deliver the expected growth metrics, it will certainly grow into its current valuation, but the place where the business is right now and the growth expectations set ahead don't leave much room for future upside from buying Palantir right now.To put it frankly, I can't uphold a bullish outlook and expectations of meaningful upside potential for a business generating $2.8B in sales (even accounting for 20–30% growth prospects) valued at $150–160B.I expect a downward movement from current levels and will certainly consider establishing my position once again, but for now—it was a time for me to take profits. I'm aware of the large following of Palantir, and it doesn't surprise me—the business is set to record incredible performance in the upcoming years. However, business development is one thing and the price you pay for it is another.Seeking AlphaFor further reference, Wall Street Analysts expect very limited upside potential with the highest price target of $80 per share, an average of $45 (implying over 32% downside risk), and the lowest one (completely detached from Palantir's potential in my view—overly pessimistic) at $11 per share.Seeking AlphaIt's also worth mentioning that more bearish voices have been raised recently, with Ark Invest unloading over 196 thousand shares and Morgan Stanley (MS) initiating its coverage with a price target of $60 per share.The Bottom LineFor transparency, I first established my position in Palantir at the beginning of 2023. It was quite large, and after I added a few times, I stopped reinvesting once the stock price increased over $25 per share at the beginning of 2024 as Palantir's share in my portfolio started to exceed my comfort level. My final average cost basis amounted to ~$11.6 per share (including several additions) and this week, I decided to sell all my shares at ~$75 per share.As Benjamin Graham likes to portray with its wonderful 'Mr Market' metaphor, the market often gets overenthusiastic with dynamically growing businesses, leading to valuation detached from fundamentals and growth prospects.With all the respect to Palantir's outstanding team capable of creating great platforms serving leading institutions and businesses globally and tremendous growth potential, I consider its valuation detached from fundamentals and growth prospects. Palantir still has much business development to achieve until it grows into its current ~$150–160B valuation. I will follow Palantir closely and look forward to establishing another position at a different stage of its development.I recognise numerous authors and analysts expressing continuous optimism and appreciation of Palantir's achievements. I share the appreciation, but as 'each to their own'—I can't share the expectations of the upside potential justifying the risk accompanying investing in any business generating ~2.8B of sales at over $150B valuation (even with 20–30% growth rates for the upcoming years).Other ConsiderationsPlease note that I haven't established a short position in Palantir. I sold my shares and currently have no position in the Company. Should you be willing to take a step further than selling your currently owned shares and short the stock, please keep in mind that it may require deep pockets and expose you to additional risk factors.Regarding Palantir's devoted bulls, please keep in mind that the stock price volatility and overvaluation are not sole risk factors accompanying Palantir, as it also has exposure to:Uncertainty regarding interest rate changes and their impact on the market as a whole.Risk of other players entering the market and creating a competitive environment.Uncertainty regarding the state of the economy and geopolitical tensions.Risk of being unable to deliver solutions/updates/errors fixed in a timely and sufficient manner within the ever-changing technological space.Should you be willing to hold on to your shares or invest in Palantir—please make sure not to put all your eggs into one basket—diversification is key, especially within such volatile industries.","news_type":1},"isVote":1,"tweetType":1,"viewCount":86,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":393211535888904,"gmtCreate":1737037119105,"gmtModify":1737037965023,"author":{"id":"4200024152697392","authorId":"4200024152697392","name":"Ochid_01","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4200024152697392","authorIdStr":"4200024152697392"},"themes":[],"htmlText":"Hallo","listText":"Hallo","text":"Hallo","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/393211535888904","repostId":"1164318115","repostType":2,"repost":{"id":"1164318115","kind":"news","pubTimestamp":1737036000,"share":"https://ttm.financial/m/news/1164318115?lang=&edition=fundamental","pubTime":"2025-01-16 22:00","market":"us","language":"en","title":"Palantir: Great Business At A Wrong Price - I Sold My Shares","url":"https://stock-news.laohu8.com/highlight/detail?id=1164318115","media":"Seeking Alpha","summary":"SummaryPalantir is a leading player in monetizing the AI revolution, serving nearly 630 customers consisting of large public and commercial organisations globally (mainly in the US).Founded in 2003, t","content":"<html><head></head><body><h2 id=\"id_1395999078\">Summary</h2><ul style=\"\"><li><p>Palantir is a leading player in monetizing the AI revolution, serving nearly 630 customers consisting of large public and commercial organisations globally (mainly in the US).</p></li><li><p>Founded in 2003, the Company initially focused on the public sector but has expanded to commercial sectors facing similar challenges.</p></li><li><p>PLTR reached a pivotal point early in 2023, when I first established my position, due to a successful deployment of the artificial intelligence platform showcasing tremendous cross-sell and growth potential.</p></li><li><p>Within this article, I explained my rationale behind selling all my shares at an average price of ~$75 per share despite the deep respect for Palantir's team and its achievements.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/92d92135e0d8cd56b21f40d970084e15\" alt=\"bunhill\" title=\"bunhill\" tg-width=\"750\" tg-height=\"500\"/><span>bunhill</span></p><p>Palantir (NASDAQ:PLTR) is an upcoming star and one of the best businesses when it comes to the capabilities of monetizing the AI revolution. Palantir serves mostly US customers (66% of revenue). During Q1-Q3 2024, it served nearly 630 customers (vs. 453 in the previous year).</p><p>Palantir was founded over 20 years ago (2003) with an aim to facilitate US counterterrorism operations. Since then, it's been focusing on the public sector and serves various government bodies across the world, but it has also expanded to the commercial sector within which large businesses often face similar struggles when it comes to data:</p><blockquote><p>For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond. Foundry is becoming a central operating system not only for individual institutions but also for entire industries. Apollo, which we began offering as a commercial solution in 2021, is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Apollo allows our customers to run their software in virtually any environment.</p></blockquote><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/893f2de122cd5efcf5893a7ce73380fd\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"491\"/><span>Data by YCharts</span></p><p>Over the first two years of PLTR's trading history, its market cap jumped as high as $60B, quickly retracted to ~$40–50B and later came crashing down to ~$15–20B range that lasted until Q1 2023. However...</p><h2 id=\"id_904035619\">Palantir Turned The Tables In 2023</h2><p>In 2023, Palantir joined forces with the ongoing and accelerating AI revolution driven by the likes of NVIDIA (NVDA), Microsoft (MSFT), OpenAI, Amazon (AMZN), Meta (META), etc. However, the result of Palantir's involvement in the AI very much differs from the abovementioned entities.</p><p>While NVIDIA facilitates the revolution with its state-of-the-art hardware, META increases the performance of marketing campaigns on its platforms, and AMZN with MSFT integrates AI-driven solutions to their existing products (AWS or Azure / Copilot), Palantir expanded its product offering with another platform—Artificial Intelligence Platform (AIP):</p><blockquote><p>AIP enables responsible AI-advantage across the enterprise by using primary, core components built to effectively activate LLMs and other AI within any organization. It provides unified access to open-source, self-hosted, and commercial LLMs that can transform structured and unstructured data into LLM-understandable objects and can turn organizations' actions and processes into tools for humans and LLM-driven agents. AIP can allow organizations to power operational use of AI and LLMs with interfaces for decision making, feedback, and safe hand-off among AI agents and human operators with wide-spectrum security and audit controls, which allow for granular control over model usage and integrated human review checkpoints throughout the workflows. AIP is designed to be seamlessly bundled with existing Palantir offerings such as the Foundry, Gotham, and Apollo platforms.</p></blockquote><p>The fact that AIP is easily integrated with Palantir's other platforms largely facilitated the deployment process and enabled cross-sell opportunities to its existing clients. With Palantir's sales & marketing efforts oriented around discussions with its clients, the Company has always been solution-oriented and aimed its platforms to respond to specific challenges faced by government bodies/large enterprises. That approach was also adopted at the early deployment stages of AIP, as Palantir held boot camps related to AIP, so its customers could witness first-hand the solution they were waiting for. Especially as most of Palantir's customers are risk-averse, with several cases of investing millions (or billions in some instances) in solutions that were never adopted.</p><p>With the 'quite a successful' adoption of AIP, many investors already saw their window of opportunity. Palantir was (and I believe still is) accompanied by outstanding value drivers, which I cannot stress enough:</p><ul style=\"\"><li><p>A long-standing facilitation of public and commercial customers with increasing share of the commercial segment proves the top-tier quality of Palantir's platforms.</p></li><li><p>Palantir doesn't really have strong competitors and is far ahead of its 'peers'.</p></li><li><p>Palantir showcased one of the most successful ways of monetizing the ongoing AI revolution.</p></li><li><p>Software-oriented business model, reflecting the scalability of its platforms across the dynamically increasing group of customers with high cross-sell and up-sell potential.</p></li></ul><p>The market recognised the abovementioned value drivers. I myself was lucky enough to establish a relatively large position in Palantir at an average cost of ~$10 per share during the first half of 2023. I made a few additions along the way, but I stopped increasing my position once the stock price exceeded $25 per share, as Palantir's share in my portfolio started to exceed my comfort level (I'm a big advocate of diversification and saw too many ugly situations resulting from high concentration—whether in terms of portfolio or business performance).</p><p>When I was buying Palantir, I expected a solid upside and believed I would stick with the business for a long time. However, as its valuation recorded a completely outstanding growth in 2024, my primary assumption couldn't hold true—leading us to the next point.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/4b9994389a97250ba8ffd3d6aa1037ef\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"491\"/><span>Data by YCharts</span></p><h2 id=\"id_3518363501\">This Week, I Sold All My Shares At ~$75 Per Share</h2><p>I feel it's appropriate to reserve a brief passage of my approach to investing to shed light on the rationale behind my exit from Palantir. I'm an M&A advisor (a fancy name for advising on buying and selling businesses) and an advocate of the timeless wisdom of investing legends such as Benjamin Graham or Warren Buffett. I tend to focus on the margin of safety, risk-to-reward profile, diversification, and often engage in income-producing businesses.</p><p>However, I'm also a technological enthusiast with a particular interest in the ongoing AI revolution with established positions in leading players (MSFT, NVDA, AMZN, META, and until a few days ago... Palantir).</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/0b3e6fdbaae97f86f240335ddb2693e1\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"636\" tg-height=\"704\"/><span>Seeking Alpha</span></p><p>To put it briefly, I lost comfort with holding on to Palantir at these prices. Its share in my portfolio reached a concerning level even though I stopped adding at the beginning of 2024.</p><p>It no longer provides investors with the margin of safety it used to, and I wouldn't feel comfortable with advising anybody on buying Palantir at these prices at the current stage of the business development. Before we jump to conclusions, let me state a few things.</p><p><strong>Yes</strong>, I believe Palantir is uniquely positioned to be a major technological player and has tremendous growth prospects ahead.</p><p><strong>No,</strong> I don't share the common belief that its growth is decelerating.</p><p><strong>However,</strong> even with upheld growth—I don't consider Palantir a $150B+ business (yet). It has quite a long way to go until it grows into its valuation. Please review the table and chart below, presenting Palantir's P/S ratio estimated through its current valuation and consensus sales estimated for the upcoming years.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/5426fecdf2b8d0a5e04c96f1cf43c065\" alt=\"Author\" title=\"Author\" tg-width=\"640\" tg-height=\"351\"/><span>Author</span></p><p>Please note that the projected sales revenue growth is pretty much in line with Palantir's growth history during the last several quarters.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8bc1b6d1f231160085205a5b36c70ad7\" alt=\"Palantir's Q3 Earnings Presentation\" title=\"Palantir's Q3 Earnings Presentation\" tg-width=\"640\" tg-height=\"161\"/><span>Palantir's Q3 Earnings Presentation</span></p><p>For reference, as some may expect higher growth in the upcoming years, let's assume the highest y/o/y growth ratio Palantir experienced as our base scenario for 2025 and beyond.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/249d080814bfeac0c6b7243cf59b548a\" alt=\"Author\" title=\"Author\" tg-width=\"640\" tg-height=\"367\"/><span>Author</span></p><p>And now, let's take a look at some of the leaders in their respective fields, facilitating the AI revolution and the technological trends adopted worldwide: NVDA, MSFT, and META. Similarly, we took their current valuation and divided it by consensus sales estimates for the upcoming years.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9d8a68271dc55d4235578638b92f689d\" alt=\"Author\" title=\"Author\" tg-width=\"640\" tg-height=\"248\"/><span>Author</span></p><p><strong>Conclusion:</strong> Even though the abovementioned businesses <em>DO NOT COMPARE</em> to Palantir and are at <em>VERY DIFFERENT GROWTH STAGES</em> as Palantir has a dynamic growth path ahead, I don't believe it justifies its current valuation—let's remember that each presented business holds leadership, well-established, and still growing position. Should Palantir deliver the expected growth metrics, it will certainly grow into its current valuation, but the place where the business is right now and the growth expectations set ahead don't leave much room for future upside from buying Palantir right now.</p><p>To put it frankly, I can't uphold a bullish outlook and expectations of meaningful upside potential for a business generating $2.8B in sales (even accounting for 20–30% growth prospects) valued at $150–160B.</p><p>I expect a downward movement from current levels and will certainly consider establishing my position once again, but for now—it was a time for me to take profits. I'm aware of the large following of Palantir, and it doesn't surprise me—the business is set to record incredible performance in the upcoming years. However, business development is one thing and the price you pay for it is another.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/329c2429e2ecf3e8466feeda7e82ae6c\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"527\" tg-height=\"252\"/><span>Seeking Alpha</span></p><p>For further reference, Wall Street Analysts expect very limited upside potential with the highest price target of $80 per share, an average of $45 (implying over 32% downside risk), and the lowest one (completely detached from Palantir's potential in my view—overly pessimistic) at $11 per share.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/82d7a1004c95483aabe93f1d4b37fc26\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"640\" tg-height=\"190\"/><span>Seeking Alpha</span></p><p>It's also worth mentioning that more bearish voices have been raised recently, with Ark Invest unloading over 196 thousand shares and Morgan Stanley (MS) initiating its coverage with a price target of $60 per share.</p><h2 id=\"id_26700235\">The Bottom Line</h2><p>For transparency, I first established my position in Palantir at the beginning of 2023. It was quite large, and after I added a few times, I stopped reinvesting once the stock price increased over $25 per share at the beginning of 2024 as Palantir's share in my portfolio started to exceed my comfort level. My final average cost basis amounted to ~$11.6 per share (including several additions) and this week, I decided to sell all my shares at ~$75 per share.</p><p>As Benjamin Graham likes to portray with its wonderful 'Mr Market' metaphor, the market often gets overenthusiastic with dynamically growing businesses, leading to valuation detached from fundamentals and growth prospects.</p><p>With all the respect to Palantir's outstanding team capable of creating great platforms serving leading institutions and businesses globally and tremendous growth potential, I consider its valuation detached from fundamentals and growth prospects. Palantir still has much business development to achieve until it grows into its current ~$150–160B valuation. I will follow Palantir closely and look forward to establishing another position at a different stage of its development.</p><p>I recognise numerous authors and analysts expressing continuous optimism and appreciation of Palantir's achievements. I share the appreciation, but as 'each to their own'—I can't share the expectations of the upside potential justifying the risk accompanying investing in any business generating ~2.8B of sales at over $150B valuation (even with 20–30% growth rates for the upcoming years).</p><h4 id=\"id_1997545293\">Other Considerations</h4><p>Please note that I haven't established a short position in Palantir. I sold my shares and currently have no position in the Company. Should you be willing to take a step further than selling your currently owned shares and short the stock, please keep in mind that it may require deep pockets and expose you to additional risk factors.</p><p>Regarding Palantir's devoted bulls, please keep in mind that the stock price volatility and overvaluation are not sole risk factors accompanying Palantir, as it also has exposure to:</p><ul style=\"\"><li><p>Uncertainty regarding interest rate changes and their impact on the market as a whole.</p></li><li><p>Risk of other players entering the market and creating a competitive environment.</p></li><li><p>Uncertainty regarding the state of the economy and geopolitical tensions.</p></li><li><p>Risk of being unable to deliver solutions/updates/errors fixed in a timely and sufficient manner within the ever-changing technological space.</p></li></ul><p>Should you be willing to hold on to your shares or invest in Palantir—please make sure not to put all your eggs into one basket—diversification is key, especially within such volatile industries.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir: Great Business At A Wrong Price - I Sold My Shares</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir: Great Business At A Wrong Price - I Sold My Shares\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-16 22:00 GMT+8 <a href=https://seekingalpha.com/article/4749799-palantir-great-business-at-wrong-price-sold-my-shares><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryPalantir is a leading player in monetizing the AI revolution, serving nearly 630 customers consisting of large public and commercial organisations globally (mainly in the US).Founded in 2003, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4749799-palantir-great-business-at-wrong-price-sold-my-shares\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4749799-palantir-great-business-at-wrong-price-sold-my-shares","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1164318115","content_text":"SummaryPalantir is a leading player in monetizing the AI revolution, serving nearly 630 customers consisting of large public and commercial organisations globally (mainly in the US).Founded in 2003, the Company initially focused on the public sector but has expanded to commercial sectors facing similar challenges.PLTR reached a pivotal point early in 2023, when I first established my position, due to a successful deployment of the artificial intelligence platform showcasing tremendous cross-sell and growth potential.Within this article, I explained my rationale behind selling all my shares at an average price of ~$75 per share despite the deep respect for Palantir's team and its achievements.bunhillPalantir (NASDAQ:PLTR) is an upcoming star and one of the best businesses when it comes to the capabilities of monetizing the AI revolution. Palantir serves mostly US customers (66% of revenue). During Q1-Q3 2024, it served nearly 630 customers (vs. 453 in the previous year).Palantir was founded over 20 years ago (2003) with an aim to facilitate US counterterrorism operations. Since then, it's been focusing on the public sector and serves various government bodies across the world, but it has also expanded to the commercial sector within which large businesses often face similar struggles when it comes to data:For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond. Foundry is becoming a central operating system not only for individual institutions but also for entire industries. Apollo, which we began offering as a commercial solution in 2021, is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Apollo allows our customers to run their software in virtually any environment.Data by YChartsOver the first two years of PLTR's trading history, its market cap jumped as high as $60B, quickly retracted to ~$40–50B and later came crashing down to ~$15–20B range that lasted until Q1 2023. However...Palantir Turned The Tables In 2023In 2023, Palantir joined forces with the ongoing and accelerating AI revolution driven by the likes of NVIDIA (NVDA), Microsoft (MSFT), OpenAI, Amazon (AMZN), Meta (META), etc. However, the result of Palantir's involvement in the AI very much differs from the abovementioned entities.While NVIDIA facilitates the revolution with its state-of-the-art hardware, META increases the performance of marketing campaigns on its platforms, and AMZN with MSFT integrates AI-driven solutions to their existing products (AWS or Azure / Copilot), Palantir expanded its product offering with another platform—Artificial Intelligence Platform (AIP):AIP enables responsible AI-advantage across the enterprise by using primary, core components built to effectively activate LLMs and other AI within any organization. It provides unified access to open-source, self-hosted, and commercial LLMs that can transform structured and unstructured data into LLM-understandable objects and can turn organizations' actions and processes into tools for humans and LLM-driven agents. AIP can allow organizations to power operational use of AI and LLMs with interfaces for decision making, feedback, and safe hand-off among AI agents and human operators with wide-spectrum security and audit controls, which allow for granular control over model usage and integrated human review checkpoints throughout the workflows. AIP is designed to be seamlessly bundled with existing Palantir offerings such as the Foundry, Gotham, and Apollo platforms.The fact that AIP is easily integrated with Palantir's other platforms largely facilitated the deployment process and enabled cross-sell opportunities to its existing clients. With Palantir's sales & marketing efforts oriented around discussions with its clients, the Company has always been solution-oriented and aimed its platforms to respond to specific challenges faced by government bodies/large enterprises. That approach was also adopted at the early deployment stages of AIP, as Palantir held boot camps related to AIP, so its customers could witness first-hand the solution they were waiting for. Especially as most of Palantir's customers are risk-averse, with several cases of investing millions (or billions in some instances) in solutions that were never adopted.With the 'quite a successful' adoption of AIP, many investors already saw their window of opportunity. Palantir was (and I believe still is) accompanied by outstanding value drivers, which I cannot stress enough:A long-standing facilitation of public and commercial customers with increasing share of the commercial segment proves the top-tier quality of Palantir's platforms.Palantir doesn't really have strong competitors and is far ahead of its 'peers'.Palantir showcased one of the most successful ways of monetizing the ongoing AI revolution.Software-oriented business model, reflecting the scalability of its platforms across the dynamically increasing group of customers with high cross-sell and up-sell potential.The market recognised the abovementioned value drivers. I myself was lucky enough to establish a relatively large position in Palantir at an average cost of ~$10 per share during the first half of 2023. I made a few additions along the way, but I stopped increasing my position once the stock price exceeded $25 per share, as Palantir's share in my portfolio started to exceed my comfort level (I'm a big advocate of diversification and saw too many ugly situations resulting from high concentration—whether in terms of portfolio or business performance).When I was buying Palantir, I expected a solid upside and believed I would stick with the business for a long time. However, as its valuation recorded a completely outstanding growth in 2024, my primary assumption couldn't hold true—leading us to the next point.Data by YChartsThis Week, I Sold All My Shares At ~$75 Per ShareI feel it's appropriate to reserve a brief passage of my approach to investing to shed light on the rationale behind my exit from Palantir. I'm an M&A advisor (a fancy name for advising on buying and selling businesses) and an advocate of the timeless wisdom of investing legends such as Benjamin Graham or Warren Buffett. I tend to focus on the margin of safety, risk-to-reward profile, diversification, and often engage in income-producing businesses.However, I'm also a technological enthusiast with a particular interest in the ongoing AI revolution with established positions in leading players (MSFT, NVDA, AMZN, META, and until a few days ago... Palantir).Seeking AlphaTo put it briefly, I lost comfort with holding on to Palantir at these prices. Its share in my portfolio reached a concerning level even though I stopped adding at the beginning of 2024.It no longer provides investors with the margin of safety it used to, and I wouldn't feel comfortable with advising anybody on buying Palantir at these prices at the current stage of the business development. Before we jump to conclusions, let me state a few things.Yes, I believe Palantir is uniquely positioned to be a major technological player and has tremendous growth prospects ahead.No, I don't share the common belief that its growth is decelerating.However, even with upheld growth—I don't consider Palantir a $150B+ business (yet). It has quite a long way to go until it grows into its valuation. Please review the table and chart below, presenting Palantir's P/S ratio estimated through its current valuation and consensus sales estimated for the upcoming years.AuthorPlease note that the projected sales revenue growth is pretty much in line with Palantir's growth history during the last several quarters.Palantir's Q3 Earnings PresentationFor reference, as some may expect higher growth in the upcoming years, let's assume the highest y/o/y growth ratio Palantir experienced as our base scenario for 2025 and beyond.AuthorAnd now, let's take a look at some of the leaders in their respective fields, facilitating the AI revolution and the technological trends adopted worldwide: NVDA, MSFT, and META. Similarly, we took their current valuation and divided it by consensus sales estimates for the upcoming years.AuthorConclusion: Even though the abovementioned businesses DO NOT COMPARE to Palantir and are at VERY DIFFERENT GROWTH STAGES as Palantir has a dynamic growth path ahead, I don't believe it justifies its current valuation—let's remember that each presented business holds leadership, well-established, and still growing position. Should Palantir deliver the expected growth metrics, it will certainly grow into its current valuation, but the place where the business is right now and the growth expectations set ahead don't leave much room for future upside from buying Palantir right now.To put it frankly, I can't uphold a bullish outlook and expectations of meaningful upside potential for a business generating $2.8B in sales (even accounting for 20–30% growth prospects) valued at $150–160B.I expect a downward movement from current levels and will certainly consider establishing my position once again, but for now—it was a time for me to take profits. I'm aware of the large following of Palantir, and it doesn't surprise me—the business is set to record incredible performance in the upcoming years. However, business development is one thing and the price you pay for it is another.Seeking AlphaFor further reference, Wall Street Analysts expect very limited upside potential with the highest price target of $80 per share, an average of $45 (implying over 32% downside risk), and the lowest one (completely detached from Palantir's potential in my view—overly pessimistic) at $11 per share.Seeking AlphaIt's also worth mentioning that more bearish voices have been raised recently, with Ark Invest unloading over 196 thousand shares and Morgan Stanley (MS) initiating its coverage with a price target of $60 per share.The Bottom LineFor transparency, I first established my position in Palantir at the beginning of 2023. It was quite large, and after I added a few times, I stopped reinvesting once the stock price increased over $25 per share at the beginning of 2024 as Palantir's share in my portfolio started to exceed my comfort level. My final average cost basis amounted to ~$11.6 per share (including several additions) and this week, I decided to sell all my shares at ~$75 per share.As Benjamin Graham likes to portray with its wonderful 'Mr Market' metaphor, the market often gets overenthusiastic with dynamically growing businesses, leading to valuation detached from fundamentals and growth prospects.With all the respect to Palantir's outstanding team capable of creating great platforms serving leading institutions and businesses globally and tremendous growth potential, I consider its valuation detached from fundamentals and growth prospects. Palantir still has much business development to achieve until it grows into its current ~$150–160B valuation. I will follow Palantir closely and look forward to establishing another position at a different stage of its development.I recognise numerous authors and analysts expressing continuous optimism and appreciation of Palantir's achievements. I share the appreciation, but as 'each to their own'—I can't share the expectations of the upside potential justifying the risk accompanying investing in any business generating ~2.8B of sales at over $150B valuation (even with 20–30% growth rates for the upcoming years).Other ConsiderationsPlease note that I haven't established a short position in Palantir. I sold my shares and currently have no position in the Company. Should you be willing to take a step further than selling your currently owned shares and short the stock, please keep in mind that it may require deep pockets and expose you to additional risk factors.Regarding Palantir's devoted bulls, please keep in mind that the stock price volatility and overvaluation are not sole risk factors accompanying Palantir, as it also has exposure to:Uncertainty regarding interest rate changes and their impact on the market as a whole.Risk of other players entering the market and creating a competitive environment.Uncertainty regarding the state of the economy and geopolitical tensions.Risk of being unable to deliver solutions/updates/errors fixed in a timely and sufficient manner within the ever-changing technological space.Should you be willing to hold on to your shares or invest in Palantir—please make sure not to put all your eggs into one basket—diversification is key, especially within such volatile industries.","news_type":1},"isVote":1,"tweetType":1,"viewCount":86,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}
