2024-02-09 09:10:58 ET
Summary
- Palantir Technologies Inc. stock has largely stalled after its significant run-up through 2023. But the underlying business' Q4 outperformance and strong forward guidance restores confidence in its prospects, particularly in AI.
- The launch of AIP has transformed Palantir's unit economics and improved its growth strategy by reducing customer acquisition costs, post-sales support spending, and sales cycle.
- While the monetization strategy for AIP remains unclear, its indirect contributions to Palantir's cost structure and broader business growth to date provides support to the stock's performance at current levels.
- The latest results also underscore incremental accretive value to the stock when AIP's direct monetization strategy eventually takes shape and complements the broader existing business further.
After a near 150% run-up through 2023, Palantir Technologies Inc.’s ( PLTR ) market valuation had stalled since the new year started. Admittedly, Palantir’s long-term target for revenue expansion at 30% CAGR has largely been thrown out the door, given the change of operating dynamics today compared to when the ambitions were initially set. Investors have largely been wary of Palantir’s inherent exposure to some immediate operating headwinds. These include an increasingly lumpy government revenue recognition trajectory, in addition to volatile demand dynamics across its international operations, and the aftermath of a failed strategic commercial investment strategy....
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Palantir's Commercial Comeback With AI Is Just Getting Started