Quick Read
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Palantir (PLTR) delivered an impressive quarter, significantly outpacing traditional software metrics, but the stock failed to rally due to already-elevated expectations and broader AI sector concerns.
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Palantir’s exceptional growth and profitability have created a widening gap between AI-first innovators and traditional software firms.
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The analyst who called NVIDIA in 2010 just named his top 10 stocks and Palantir wasn’t one of them. Get them here FREE.
Palantir (NASDAQ:PLTR) just delivered one of the most impressive quarterly blowouts in its history, but it wasn’t quite enough to power a turnaround in the stock. Not with expectations as high as they were and broader fears surrounding what AI could do to some of the software plays out there, including ones that have already successfully pivoted.
While investors aren’t yet in a rush to back up the truck for Palantir after the incredible number, I do think that the letter from CEO Alex Karp was full of interesting food for thought as investors look for a bit of perspective on the state of the AI boom. Indeed, it’s not hard to think of the boom as getting quite bubbly, especially with the great Michael Burry publicly disclosing his own bearish bets against firms such as Palantir.
Palantir’s latest quarter sets a high bar. That’s exactly why investors might be growing nervous
With a lot of less-than-useful AI tools and content across the internet, it can certainly feel at times like AI is nothing more than a bubble. And when you’ve got a genius in Burry who’s remarking on his thoughts of such a bubble, it’s hard to go against the man with a long position in a name like Palantir.
The analyst who called NVIDIA in 2010 just named his top 10 stocks and Palantir wasn’t one of them. Get them here FREE.
In any case, Karp notes that there exists a “no-slop” zone that’s not just a commoditized wrapper around someone else’s large language model (LLM). Indeed, Karp is right on the money, and the incredible growth numbers from the latest quarter are doing the talking. While it can be tough for investors to tell what’s just a wrapper and what’s a moat-worthy piece of infrastructure that can actually produce value from the AI underneath the hood, I do think that we’re entering an era of haves and have-nots within software.
Indeed, the SaaS-pocalypse sell-off has marked everything down across the industry in a rather indiscriminate fashion. With Palantir’s AI Platform (AIP) positioning standing tall as one of the firms in the “no-slop zone” (the government would probably never settle for “slop”) in these earlier days, investors might wish to put the firm in a group of its own. Karp did note that Palantir has “an N of 1.”