2024-02-09 15:35:02 ET
Summary
- Palantir reported rebounding year-over-year revenue growth of 17% and 20% in the third and fourth quarters, respectively, after changing its sales model.
- The company differentiates its AI products by using a K-LLM kernel to amalgamate responses from multiple LLMs into the best possible answer.
- Its "Boot Camp" sales model, which involves workshops to train potential customers in using AI to solve real-world business problems, has been successful in increasing sales and reducing costs.
When I last wrote about Palantir as a Buy ( PLTR ) on October 20, 2023, there was growing bearishness surrounding the stock. One of the issues critics had about the company was its long sales process that allows a potential customer to trial its offerings. These trials could take up to six months to complete, were costly and inefficient, and sometimes failed to result in a sale. When I wrote that article, Palantir was coming off a quarter in which it only produced revenue growth that had dropped to 13% year-over-year. Considering that this company brands itself as a big beneficiary of growth in Artificial Intelligence ("AI"), and other beneficiaries of AI have reported a surge in sales growth, some investors became concerned with the decelerating revenue growth since July of 2021 and pointed the finger at everything from the company's go-to-market plan leading to poor customer acquisition to something being wrong with its sales teams.
However, management has changed its sales model since my last article and has reported rebounding year-over-year revenue growth of 17% and 20% in the third and fourth quarters, respectively. In addition, fourth-quarter results show Palantir producing its fifth straight quarter of GAAP net income profitability. The stock was already in line for potential inclusion in the S&P 500 last quarter, as the company only needs four consecutive quarters of profitability to become eligible. Investors can look for additional potential upside once included in the index....
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For further details see:
Palantir Q4: Boot Camp Sales Model Make It A Game-Changing AI Software Investment