Following a breakout year, this veteran analyst sees even more upside in 2025. Transcript: STEPHEN 'SARGE' GUILFOYLE: If I could tell everyone to invest in one stock I think everyone knows what I would say.
Cathie Wood -- the founder and CEO of investment management firm Ark Invest -- has made her name by betting big on disruptive and innovative companies. This strategy reaped rich rewards in 2023 and 2024 as her flagship exchange-traded fund, the ARK Innovation ETF, clocked an impressive gain of 82% to beat the S&P 500 index's 53% return by a nice margin.
Palantir Technologies Inc. is now the most expensive mega-cap ever, priced for perfection with a P/E over 200x and a strong AI growth narrative. Current fundamentals and guidance support robust growth, but not enough to fully justify the extreme valuation without a major positive surprise. Palantir's unique government position, high margins, and AI leadership are key strengths, but competitive risks and margin pressure loom.
Palantir continues to deliver strong revenue growth and margin expansion, driven by accelerating enterprise AI adoption and robust government contracts. Strategic partnerships in healthcare and banking, plus the rollout of Warp Speed for manufacturing automation, position Palantir for long-term industry leadership. Despite impressive growth, Palantir trades at a significant valuation premium, introducing heightened risk if growth slows or competition intensifies.
The analytics software company now trades at an eye-watering 232-times future earnings, making it vulnerable to a selloff.
Bearish concerns over dilution and valuation ignore Palantir's asset-light model, rapid enterprise adoption, and accelerating monetization that converts dilution into durable, cash-generating growth. Palantir's U.S. commercial segment hit a $1B annual run rate in Q1, growing 71% YoY and 19% QoQ. The company secured 139 $1M+ deals and booked $810M in U.S. commercial TCV, up 183% year-over-year.
Given PLTR's continuous rise in stock price, it's essential to evaluate its current standing and determine whether this presents a buying opportunity.
Palantir is priced like a perfect company, so even solid earnings that only meet expectations can send the stock falling. The company's high valuation relies on aggressive revenue growth and margins staying strong—something it's managed so far. Justifying today's share price requires an unusually low discount rate, which seems unrealistic given current market risks.
Shares of Palantir (PLTR) closed Tuesday at an all-time high as optimism about easing tariffs has driven a broad market rally that has lifted artificial intelligence stocks.
Palantir's recent recovery may have occurred overly fast and furious, thanks to the robust enterprise SaaS spending trends in the commercial sector. Despite the DOGE uncertainties, the company's US government sector has also reported excellent growth, with it triggering the growing RPOs, expanding net dollar retention, and Rule of 40 outperformance. While these metrics may be highly impressive, we maintain our conclusion that PLTR is no longer trading based on fundamentals, and mostly, momentum at current levels.
In its most recent earnings report, Palantir Technologies Inc. NASDAQ: PLTR announced that it had signed 139 deals valued at least $1 million. That wasn't surprising to long-term investors.
Shares of Palantir Technologies Inc. (NASDAQ: PLTR) were mostly flat through a.m.