Shares of Palantir (NASDAQ: PLTR) have been flying this week. The corporate’s inventory gained 39.3% as of 1:50 p.m. ET on Friday, and was up as a lot as 41% earlier within the week. The leap comes because the S&P 500 (SNPINDEX: ^GSPC) was flat, whereas the Nasdaq-100 gained 0.4% within the week’s buying and selling.
The artificial intelligence (AI)-powered intelligence and analytics firm reported better-than-expected earnings this week, sending shares increased.
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The numbers
Palantir noticed its This autumn gross sales develop 34% yr over yr and 14% quarter over quarter, delivering earnings of $0.14 per share on $828 million in gross sales. The numbers handily beat Wall Road’s targets of $0.11 per share and $776 million. The corporate’s steerage additionally topped estimates: Palantir expects gross sales of $3.75 billion for 2025 when consensus estimates have been $3.52 billion.
By no means one to draw back from a daring assertion, CEO Alex Karp mentioned of Palantir’s efficiency, “Our enterprise outcomes proceed to astound, demonstrating our deepening place on the heart of the AI revolution.” He drove house the purpose that Palantir noticed the potential of huge language fashions (LLMs) sooner than most, serving to the corporate commercialize the expertise higher than a lot of its opponents.
Palantir carries a hefty premium
Whereas the corporate’s progress is spectacular and its potential is obvious, the inventory is not with out danger. Valuation metrics aren’t all the pieces and might even be deceptive, however Palantir’s is so excessive that it calls for consideration. The corporate’s price-to-earnings ratio (P/E) is presently 585 — a particularly excessive determine.
I do not need to downplay the corporate’s actual worth and efficiency, however the fact is, there may be numerous hype surrounding the corporate. Provided that hype and its sky-high valuation, any indicators of weak spot or slowing progress transferring ahead may spell bother for its share worth.
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*Inventory Advisor returns as of February 3, 2025
Johnny Rice has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Palantir Applied sciences. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
