Palantir - an Investment Idea


Published: 16 December 2020

DAEMON Insights

 Palantir Summary:

All organizations (business, govt & otherwise) have enormous amounts of siloed data. Integrating heaps of differentiated & unwieldy data into functioning platforms/interfaces that allows for AI enhanced problem solving will be the holy grail of the future economy. The capacity to out-maneuver, create better & faster solutions and to do so with sensitivity tests on societal impact will create hundreds of billions of dollars of value, both in revenue growth and costs saved.
Silicon Valley, or specifically Marc Horowitz, has rightly stated that “software is eating the world,” but that was Generation 1. GEN2 will be AI-assisted platforms integrating with human ingenuity. We are in the early innings of GEN2, and even now we can begin to see how a “Singularity” (GEN3) of sorts may be within grasp in the next 50 years. I believe Palantir will be a market leader in the contest to gather, elucidate and monetize data on behalf of many corporate clients.


Palantir Qualitative

Palantir approached the “data problem” from an entirely fresh starting point, emphasizing a generalized platform and human integration for ease of manipulation in real-time and in dynamic situations. In this regard, Gotham & Foundry products are unique in comparison to competitors.
Going forward, “dumb” organizations (those without AI-assisted systems) will find it increasingly difficult to compete without the competitive edge of AI/data-driven insights and solutions. Palantir and services like theirs will become more like a utility in the not-too-distant future as it becomes an absolutely essential service to corporate survival. What’s the old business adage: “solve their problems, not their whims.” I think I just made that up. Anyway, Palantir offers one of the strongest value-propositions in business today. They can potentially grow the top line, increase margins, increase organizational resourcefulness, speed and resilience. So, Palantir’s corporate and government clientele list will grow; and it has a very strong chance of growing exponentially within the next five years.
Finally, Peter Theil, Alex Karp and Stephen Cohen are leader/managerial SEAL TEAM SIX. Equal parts rational, effective, and whacky (world-changing kinda crazy). =)


Palantir Quantitative

The International Data Corporation (“IDC”) forecasts the overall AI market to approach $98.4 billion in revenue by 2023. Palantir is well positioned to capture a large share.
Revenue in 2019 was $742.6 million, which represented a growth rate of 25% over 2018. And in the most volatile 6 months of 2020 (Q1 & Q2), Palantir has grown 49% YoY.
As of today, December 15th, Palantir shares are trading ~ $26. Based on current revenue/profit it is definitely overvalued from a value perspective, but as a growth/innovation investment it is a STRONG BUY.


Palantir Conclusions

These guys (Thiel, Karp, Cohen) are creating the future probably faster than most.
Their client list began with the US government; corporations will follow-suit – no doubt.
It will scale to every industry and corner of the physical world. Welcome, Big Brother?
This investment will be 10x and beyond.

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