Trade Whisperer
Memory Engineer & Data Scientist, Founder of Blue Pink Candles
Palantir's strengths are already priced in, so valuation is the friction after its big run. The fundamentals are exceptional from a big-data standpoint, and its Ontology structures context in advance so AI models burn fewer tokens than LLMs rebuilding context on every query. That advantage is real but reflected in the price, making this a stock to watch rather than hold here. x.com x.com x.com x.comÂ
Palantir is not threatened by Anthropic, because it is the integration fabric that makes AI deployable across an enterprise, not an AI model. Being LLM-agnostic, it turns Claude into jet fuel, contrary to Michael Burry's view. Its Ontology unifies data across silos such as SAP, Salesforce, legacy systems and sensors, its revenue tracks measurable customer gains, and defense users cannot simply lease it for months and hand it back, since they collect data for years. x.com x.com x.comÂ
Palantir still trades at 87 times sales even after falling 20% this year. 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'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 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'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
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 valuation premium is shrinking because it is no longer the only player in defense AI. Its 2024-25 run at hundreds of times earnings rested on being first and only there, but frontier labs it once partnered with now sign directly with the Pentagon, and OpenAI and Anthropic are moving into forward-deployed engineering for enterprises. CEO Alex Karp's attack on the labs reflects that pressure. Opportunity returns once revenue and profit scale up and the valuation is digested. x.comÂ
Palantir at 50x sales is not undervalued, despite CEO Alex Karp saying on CNBC that the company is systemically undervalued. Insiders are selling shares like hot cakes, which makes his claim look false. x.comÂ
Palantir is irreplaceable even if it is probably overvalued on traditional metrics at $150. Its government contract moats, new defense AI deals and one of the most defensible software positions in enterprise AI support the stock. Overvalued and irreplaceable are not mutually exclusive. x.comÂ
Palantir is overvalued, trading around 100 times forward earnings, 161 times trailing earnings and 73 times sales. x.comÂ
