(PLTR), (GOOGL), (MSFT), (NVDA)
It's time to grab your magnifying glass and take a closer look at a story that's emerging from the shadows of the tech giants.
We're all too familiar with the A-list celebrities of the artificial intelligence (AI) world, namely Alphabet (GOOGL), Microsoft (MSFT), and Nvidia (NVDA). These are the names that echo in every conversation about AI breakthroughs.
But is there someone else knocking on the door of innovation? A name that's only just beginning to stir the echoes?
Let's talk about Palantir Technologies (PLTR).
Now, I must confess, Palantir isn't new to the game. Nearly 20 years old and famous for its U.S. Government contracts and connections to Silicon Valley's Peter Thiel, the big-data analytics firm has been flexing its AI muscles for quite some time.
Yet, it's only in the last three years since going public that Palantir's stock has danced to the highs and lows of Wall Street's fickle tune.
Remember that rocket ship known as Palantir's stock, shooting up by an astonishing 130% in just over a quarter? That was something to watch.
But let's not just gawk at the numbers; we need to ask: Does Palantir deserve the fanfare? Is it time to crown this company as one of the market's best AI stocks?
I don't toss crowns around lightly, so let's dig into the specifics.
Palantir's second-quarter revenue grew a respectable 13% YoY to $533 million, just a hair above the high end of management's guidance. And while a 13% increase might not set the world on fire, it’s good to take a pause and appreciate the masterpiece in the margins.
Operating expenses? A mere 1% rise in Q2, leading Palantir to the golden gates of profitability.
Here's the kicker: Palantir reported its third consecutive quarter with $0.01 in earnings per share (EPS) based on generally accepted accounting principles (GAAP). A mere penny, you say? Ah, but remember, the journey to towering profits always starts at ground level.
Was this a bad quarter for Palantir? Far from it. Still, before we christen AI as the ultimate game-changer, let's face the reality that Palantir could be posting higher growth. The crown will have to wait.
What has me leaning forward in my seat, however, is the company's consistent profitability and free cash flow. A GAAP profitable record for the third quarter in a row and a whopping $285 million in adjusted free cash flow in the first half of 2023, marking a 213% YoY growth, are figures you can't simply shrug off.
Let's revisit Palantir's Artificial Intelligence Platform (AIP), a subject I have been following and will urge you to watch closely in the coming months.
The world of large language models (LLMs) is no longer a future concept; it's a current reality. Integrating with Palantir's Foundry applications, AIP isn't just technical jargon but a practical step into untapped potential.
Foundry's value lies in its practicality and adaptability. Whether for a seasoned data analyst or a novice explorer, Foundry delivers various analytical tools.
Rather than painting it as a Swiss army knife or turbo engine, it's worth considering Foundry as a tailored solution for different data needs. It offers table-based scrutiny, geospatial pattern recognition, time series dissections, scenario simulations, and more.
In a business environment awash with data, Foundry stands as a robust tool that ensures no essential information escapes notice.
Now, moving to AIP's integration within Foundry, it's more than a vibrant addition; it's a strategic enhancement. AIP augments Foundry's capabilities, not just boosting its existing functions but adding a whole new layer of opportunity.
Imagine it as a software update for a craftsman's toolbox, one that is attentive to the precise requirements of modern data analysis.
This combination isn't about fanciful upgrades; it's about empowering users in practical ways. With AIP integrated right into Foundry, users can tap into additional features and capabilities with minimal fuss. It's not merely a novelty; it's a strategic move by Palantir to stay ahead of the curve.
In 2023, where artificial intelligence has transitioned from buzzword to business necessity, Palantir's alignment of AIP and Foundry isn't just innovation for innovation's sake. It's a calculated play, one that is in tune with market demands and technological progress.
Already active across 100 enterprises and under discussion with another 300 firms, this platform is making significant inroads. The numbers are an early indication of Palantir's short-term and long-term growth prospects.
Palantir's stock, trading at 16 times price to sales (P/S), might seem a premium compared to its competition, but there is robust justification for the demand that AIP is generating.
Coupled with Palantir's unwavering stand on profitability and liquidity, the convergence of AIP and Foundry adds an analytical depth that is both refreshing and relevant.
Investors seeking sustainable growth might find Palantir's technological foresight and fiscal responsibility an inviting combination. After all, this may just be a story that's only beginning to tell itself.
