Palantir Technologies: Soaring Despite Fragile Valuation

Investors who had been hesitant thus far were convinced otherwise by Palantir Technologies’ compelling third-quarter report, as the company's stock experienced a sharp rise, climbing up to 24.1%. Burdened by concerns about high valuation and the dynamics of Artificial Intelligence (AI), Palantir has now demonstrated impressive figures, reaching a new all-time high. Even at 1:51 PM ET, the stock was up 22.2%. The notable upward trend of the stock, which has increased by about 689% since the emergence of generative AI, raises the question of whether a late entry could still be worthwhile. The key to success lies in the AI-driven data solutions widely utilized by U.S. government agencies. The launch of the AI Platform (AIP) significantly accelerated growth in the U.S. commercial sector. Despite some skepticism among analysts, Palantir scored with its latest results: revenues grew by 30% to $726 million, significantly exceeding the expectations of $701 million. Particularly, the U.S. commercial sector impressed with 54% growth and a strong increase in customer numbers by 79%. Expanding the customer base beyond traditional defense and intelligence sectors is considered a crucial success factor for Palantir's future. The company's profits also increased, with earnings per share rising by 43%. The question of valuation remains prominent. With an expected earnings per share of $0.43 next year and a price-to-earnings ratio of over 100, the stock is not suitable for every investor. Nevertheless, Palantir claims a unique position in the AI ecosystem. The so-called "Boot Camps" offer potential customers the opportunity to work directly with Palantir engineers to develop AI solutions precisely tailored to their business needs.