Palantir Partnership Boosts Growth Narrative
"Palunteer. So this is a stock that's really been on a tear. Up about 143% so far this year and today we're seeing a gain of as much as 3.2%. This is after the company launched the fact that it's going to be having a new partnership with Lumen Technologies. This should support more AI services. Lumen has agreed to spend more than $200 million on Palunteer software over the period of several years. In hopes to better manage and operate its networks and services. We are seeing shares of Lumen which is ticker LUMN up about 4% right now as we speak. But Palanteer um clearly gaining as well."
The segment underscores Palantir's explosive performance with a 143% rally year-to-date and highlights a major new partnership with Lumen Technologies, which is expected to drive further AI services growth.
New Commercial Partnership as a Positive Catalyst
"Another week, another new deal. This one was announced on the commercial side. I wrote about this for MarketBeat and the deal is with a company called One Mednet Corp. They're a publicly traded company. So what's happening there is One Mednet's going to be using Palantir's AIP platform to enhance its healthcare and data analytics capabilities."
The speaker discusses Palantir securing a new commercial partnership with One Mednet Corp, a publicly traded healthcare company. The deal is expected to accelerate One Mednet's use of real-world imaging data in clinical research, and is seen as a positive catalyst that reinforces Palantir's expanding role in both commercial and government sectors.
Earnings Breakout Potential at Critical Resistance
"So that's telling investors that right now that's a pretty critical point of resistance that the stock's looking to move past and the next catalyst for that movement is probably likely to be earnings. If the company delivers an earnings report that investors have become used to, then I think you could easily see Palantir blow past that point and then we're talking about that $200 price level and even some analysts have been going above that $200 price level."
The speaker highlights Palantir trading near a critical resistance at around $188 and argues that if the upcoming earnings report meets investor expectations, the stock could break out to the $200 level. This insight underscores the stock's technical setup and the earnings report as the catalyst for further upside.
Caution on Palantirs Extreme Valuation
"But Ive noticed that every time tech investors want to say that were not in a bubble, they use Nvidia as the go-to example. For whatever reason, they not using the example of Palenter. Isnt Palenter the Messi of AI, the leader of AI, the company thats emblematic of the AI tech sector? Palenter trades at valuations that would make bubble companies blush. It trades at a 540 trailing PE, a price to sales of above 100, now at 117. This is in a category that has never happened in history."
The speaker raises concerns over Palantir (referred to as Palenter) by contrasting its extreme valuation metrics against typical defensive tech valuations, such as Nvidias. Despite its leadership position in AI, the extraordinarily high trailing PE and price-to-sales ratios create a case for caution.
Trade Call: Avoid Buying Palantir (PLTR) Due to Overvaluation
"FYI, he's got a sell on Palantir. Every multiple on Palantir tells me not to buy it. So, I'm not chasing it."
The speaker advises against investing in Palantir (PLTR), citing excessively high valuations and multiple factors that indicate the stock is overpriced. This serves as a cautionary signal to avoid or steer clear of initiating new positions in Palantir.
Strong Fundamentals and Growth Catalysts for Palantir
"Palantir has grown revenue from 600 million to 3.4 billion, and its return on invested capital soared from negative 130% to almost 50%. Additionally, major contracts with Boeing and the UK Ministry of Defense have boosted its backlog."
The commentary highlights Palantir's impressive operational turnaround, including accelerated revenue growth, marked improvement in profitability metrics, and several strategic contract wins. These elements underline the company’s robust business fundamentals and free cash flow growth potential, although the high current valuation tempers the trade call.
Palantir Entry Call at $147.88
"Palantir... 147.88 is where I would like to enter into Palantir when they have a pullback."
A trade call was made for Palantir with a target entry price of $147.88 on a pullback, advising investors to wait for a deeper price move.
Palantir Entry Position Trade Call
"One 47, 88 is where I would like to enter into Palantir when they have a feedback."
An entry trade for Palantir (PLTR) is recommended at approximately 147.88, presenting a short-term opportunity.
Company Commentary: Palantir Overvaluation as Opportunity
"My Palantir is up 685% in my own portfolio. And when we first purchased Palantir, which wasn't that long ago in the spring of 2024, it was already being called overvalued. But the point is, overvaluation in the early phase can actually be an indication of a great underlying company with strong, forward-looking inputs that aren\'t captured by traditional earnings metrics."
Gardner uses his personal experience with Palantir to illustrate that even stocks deemed excessively overvalued by traditional metrics can deliver substantial long-term returns if they exhibit robust advanced technology and innovation. While not an explicit buy call today, his commentary suggests that investors should reexamine overvaluation narratives as potential buying opportunities.
Sell Palantir Due to Elevated Valuations
"So I took Palantir out of the portfolio, right? I mean, I think that like you need to hold the price to sales constant, but when you see stuff like at a hundred or even 50, you think like that's going to be hard to get a good return over the next three years."
The speaker explicitly mentioned removing Palantir (ticker PLTR) from the portfolio primarily due to its elevated price-to-sales ratio. The rationale centers on the importance of maintaining valuation discipline within a growth portfolio that is built on low marginal cost fundamentals. By trading off high-growth companies that maintain low marginal cost and strong earnings expansion, the manager rebalances the portfolio to optimize long-term performance.