Palantir is 'a bit unstoppable' after overwhelming Q2 commercial growth

if you like this quarter from Palanteer and should you ride this momentum? >> You know, I think you should. Um, even my 14-year-old son was was buying this stock ahead of earnings, right? Um, what I love about this quarter is that it was the cash flow that proved this is a profitable company. When you look at free cash flow, this is very different from the Palunteer that we saw a few years ago. Um, this just goes right after Microsoft last week showing there's a great return on invested uh, you know, all the AI centers, all the chips, everything. And now we're seeing that software, I mean, if you just look at the government stuff, it's through the roof, but we knew government contracts were going to be enormous. What I love to see is I like to see that US commercial sector just going higher and higher. So outside of hedge funds blowing up, outside of momentum just dropping, I think you can be long with Palunteer. Just remember it's a high multiple stock and it's all about this beat and raise beat and raise, but right now it's a bit unstoppable. Omar, how do you even value a company like uh like a Palunteer? I mean, it's trading at 85 times forward earnings. I mean, it's it's a discount to its historical average of around 195 times. Like these are big multiples. What do you do with a company like this? Yeah. Well, you know, normally what we do with Evaloid, you know, precisely the growth trajectory and it's not necessarily just about one quarter. It's really more about, you know, their outlook. It's about their earnings projection. And and in many cases, particularly for these kind of AIdriven companies, we basically look at where their profitability is going and and and I think in in this particular case, the return on investments and return on equity seems to be going in the right direction. I think a lot of what happens is you have to separate growth companies from the rest because at the end when you're looking at investing in growth it's really more about you know how you see that EPS growth going relative to what you expect for your ROIs and I think in this particular case what has transpired especially with all AI related stocks is that a lot of the adoption that we all fear was not going to happen seems to be proven incorrect. In other words, you know, a lot of the AI adoption that everybody was was talking about, you know, at the end of last year, it seems to be happening. And I think these companies, these software companies, these developers continue to profit from it. >> Omar, that's a really great point. And Brooke, I'll put that one to you because as we've gone through this earning season, of course, the hyperscaler earnings last week, big cloud numbers out of Amazon. Microsoft crushed it. Uh, Palanteer crushed it. Raised outlook. We're going to have AMD earnings today. They're going to crush it, too. This narrative coming into earnings season that AI wasn't being monetized, that it was peaking in terms of demand, none of that has proven true. >> Yeah. The AI jitters, the fear that the return wouldn't be worth how much all these companies are investing within AI was the major worry among so many analysts heading into that. And now we're been hearing some relief so to say from so many on the street saying that right now what we saw was that there is this parabolic US demand for AI solutions. That was what one DA Davidson analyst had wrote in a note this morning. And and I think really the proof is in the pudding here. We're seeing this demand really come to fruition here. We're seeing the proof points that Palunteer's CEO, Alex Karp, had pointed out. And I was mentioning to you, Brian, this morning that this really was somewhat of a a rally cry on the earnings call last night, saying, "Don't stay on the sidelines. Get in. Get in on this momentum." And it seems like the proof right there, especially as Lee pointed out, we got that US government uh revenue jumping 90% to 809 million for the three months uh through June 30th. And so really the proof points are coming to fruition here, sort of pushing away that fear that Wall Street had that we won't necessarily see the return. But I think the big question will be will SpaceX really, you know, step up to the podium here and and prove this ongoing proof points that many are putting out this quarter. Lee on on Palunteer. This is a stock that historically people have ignored the valuations on. They ride the momentum. But if you're looking at this Palunteer quarter, is this now your justification to get back into other Momo names, those other momentum stocks like a Micron, like a SanDisk that have been absolutely hammered the past month? >> You know, I think that's a great question. You want to go back into the degenerate gambler trade. And I think that right now, if I was just a day trader and I was just screwing around for the next month or so, I'd probably think the coast is clear. Let me tell you what bothers me about momentum. Nothing about earnings. Earning season is great. You're going to have to have an external shock. You're going to have to have oil matter not to ride this momentum. Oil doesn't matter. You're going to have to have the Fed not raise rates or make some suggestion that inflation's going to come and get you. And we're not going to see that until September. And so I think all the things that we're concerned about killing momentum outside of more hedge fund leverage going, you know, and blowing up, you're going to have a, I think, a decent August because it's September where rates may start to matter. It's September where oil may start to matter. Between now and then, what do you have? If you have bluebirds and lemonade and everybody telling the tale of guidance couldn't go higher, earnings couldn't be better. And if there's any companies out there that don't just in the slightest bit dazzle us, they're going to go down. >> Omar, have you been dazzled by this earning season? It's been amazing just to see especially because the first quarter was very strong and I think having these you know beginning of the second quarter earnings being so strong you know continues to be supportive of you know just the idea of the capital spending cycle that we all talk about at the beginning of the year seems to be proving you know that in the earnings numbers. So this uh big question that everybody had of the amounts of capital expenditure and how much that was going into different parts of the market you know seems to be you know driving a lot of these earnings field. Uh on the other hand you we also see that the consumer spending continues to support you know continuous growth for these earnings. You know it's kind of interesting when you look at you know GDP nominal GDP growth that is very correlated to earnings growth and that seems to be proving correct again despite all the noise and all the volatility that has gone into that. So a lot of that resilience of the US economy is actually now you know going into earnings growth and that has been I would probably say surprising for most of us but you know very very good uh as we go into the second part of the year.