Palantir: A Soaring Flight with Obstacles

Palantir Technologies has shown remarkable development this year. With an impressive increase of 150 percent, the company has raised its market value by about 60 billion dollars. This momentum is largely attributed to its inclusion in the S&P 500 Index in September and its successes in the field of artificial intelligence. However, experts on Wall Street view the company's future with caution. Despite the jubilation over the spectacular share price increase, a correction is expected. Analysts' price targets indicate a drop of over 30 percent within the next twelve months. The fundamental valuation of the stock is at the center of concerns. The current multiplier of over 100 on future earnings is extremely high compared to the industry standard. For comparison: Nvidia is valued at 37 times and Oracle at 26 times future earnings. The voices of analysts are clear: Palantir cannot afford to make mistakes in the upcoming quarterly earnings announcement. While Palantir is now considered the third-best performer in the S&P 500 and can even follow Vistra, the assessments are mixed. Of the 21 observed companies, only four recommend buying the stock, while ten advise holding, and seven rate the stock as a sale. Alex Karp, co-founder and CEO of Palantir, remains unimpressed. He believes the analysts simply do not understand the company. While the track record regarding new customers such as CBS Broadcasting, General Mills, and Aramark is impressive, the question remains how sustainable this success will be. Investors like Joe Tigay of Equity Armor Investments predict a volatile future due to the high valuation. In November, it will become clear how Palantir performs when the figures for the third quarter are published. A 26 percent increase in revenue and a 28 percent growth in earnings are expected. The continuous government contracts provide Palantir with a solid foundation, despite potential price fluctuations. The focus should be on expanding the customer base, as Jim Worden from Wealth Consulting Group emphasizes. The company is relying on workshops to convince potential and existing customers of its technology. Hilary Frisch of ClearBridge Investments sees this as the key to acquiring new customers. Ultimately, the recent share gains may be more the result of retail investor interest than institutional purchases. The inclusion in the S&P 500 could have additionally caused fluctuations.