PLTR - Palantir: The Sell-Off Is A Long-Term Opportunity For A Clear Winner In AI

2024-05-17 10:05:37 ET

Summary

• Palantir's Q1 2024 earnings beat expectations, showing growth in its U.S. commercial customer count and total customer count.
• The company's clean balance sheet, with no debt and significant cash and marketable securities, puts it in a favorable position.
• Despite risks and criticisms, Palantir's strong performance and potential for future growth make it an attractive long-term investment.

Palantir ( PLTR ) rallied into earnings, and this is not the reaction I expected after PLTR beat the top-line revenue estimates in Q1 and raised their 2024 revenue guidance. Some would say PLTR is a cult stock because insiders and institutions hold less than 50% of its shares , but I believe this is one of the times that retail was ahead of the 'smart money'. From being called a black box to having its ability to grow its commercial business segment questioned, PLTR has emerged as a clear winner in the software artificial intelligence (A.I.) space. Regardless of anyone's opinion, the facts are that PLTR's U.S. commercial customer count grew by 69% YoY from 155 to 262 while their total customer count increased by 41.69% from 391 to 554 YoY. The largest governments and companies utilize PLTR's software and Oracle ( ORCL ) became the latest company to partner with PLTR to deliver A.I. solutions and cloud services to both governments and commercial businesses globally. Labeling PLTR as a black box in 2024 isn't justified. Some may dislike how close PLTR is to government agencies or that they are embedded throughout the military-industrial complex, but that doesn't mean their products aren't best in class. PLTR has built a top-tier software company of tomorrow with $0 of debt, $3.87 billion in cash and marketable securities and is expected to generate between $800 million and $1 billion in adjusted free cash flow ((FCF)) in 2024. I have never looked at PLTR as a short-term investment and believe that over the next 5-10 years, PLTR could have a Salesforce ( CRM ) type ark from the revenue and profitability it generates to its valuation. I am looking at the sell-off as a buying opportunity and believe this article will age well, looking back 5-10 years from now....

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