Published: 16 December 2020
• 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 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). =)
• 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.
• 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.