Danny cheng
Technology Investor, Homily Charts & Technical Analysis
Continued improvement in fundamentals and technicals could carry Palantir to megacap scale. A $1 trillion market cap is a realistic destination for strong growth companies, and Palantir appears on that path, though its timing is uncertain. Drawdowns remain opportunities to accumulate until the thesis changes. x.comÂ
Palantir's nearly year-long Stage 1 consolidation was an accumulation phase in which large institutions kept adding steadily, even as Elliott Wave analysts forecast collapses to $40, $60 or $80 and others called the move a bull trap. Sustainable wealth is built during uncomfortable, high-volume consolidations and shakeouts, not by chasing new highs, so drawdowns are welcome. x.comÂ
Palantir's government contract activity is growing sharply, supporting its resilience despite the share-price pullback. Its $2.1 billion in 12-month obligations is up 184% from the prior year, among the strongest increases tracked. The Cryptic Bottom Index remains green despite the pullback. Its score is among the highest in the Cryptic Research System, led by growth and profitability, though catalysts and valuation score weakest. x.com x.com x.comÂ
Palantir's government and commercial AI demand keeps compounding. Holding through volatility still calls for careful sizing: a 590% gain can turn into a 50% drawdown fast. x.com x.comÂ
Palantir's roughly $500B market cap and 80x sales make it prudent to trim exposure despite continued affection for the company. Its tenfold run has already delivered substantial gains, not just the beginning; smaller speculative positions are getting crushed in this environment. x.com x.comÂ
Palantir makes an amazing product no one else can match, and once customers are in the system it becomes incredibly difficult to leave. That has driven immense growth in customers, earnings and backlog, making it one of five growth stocks set to dominate over the next decade. x.comÂ
Palantir is worth its expensive valuation because its growth should carry it into a reasonable multiple over the years. It is projected to grow over 80% by the end of 2027, remaining deal value topped $6B, up 123.6% year over year, customers rose 23.6% to only about 1,000, leaving plenty of room, and its Rule of 40 score is 155%. x.comÂ
Palantir's share price demands unusually fast cash and profit growth despite its strong business. At roughly $210, it implies 48.5% annual growth for five years; at 32% annual growth, the shares would be worth $96.64. It is a Watch, not a Buy at today's prices. Q2 sales rose 93% and cash flow after employee stock pay was $2.52 billion over 12 months, but government concentration, cancellable contracts and rising stock pay remain risks. x.com x.com x.com x.com x.com x.com x.com x.comÂ
Better AI models make Palantir more valuable to customers, whose higher spending makes it more cash generative. Its chart shows net dollar retention at 157% and quarterly free cash flow per share at $0.47, roughly 8x its level three years earlier. Palantir will soon be a 100-bagger alongside AMD. x.comÂ
Palantir may be undervalued because the market values it as a software company while its opportunity is much bigger. It spans AI deployment, government contracts, enterprise adoption and mission-critical data infrastructure, and expensive stocks can stay expensive when the business keeps expanding. x.comÂ
Palantir's reliance on pay-as-you-go service with refunds makes customer cancellations and sudden earnings declines or write-downs a serious risk as AI and high SaaS prices pressure the business. Its 10-Q warns of these risks. Anthropic can and will easily replace Palantir with an all-in-one platform under Democratic control of the legislative branches. x.com x.comÂ
Palantir is approaching fair value after falling to nearly half its October price, which had been far too high, and will likely drop into an $80-120 buy zone. The stock will always carry some premium, so there is no need to wait for the exact bottom; it should eventually return to $200. x.comÂ
