If You Are a Palantir Shareholder...Get READY for May 4th.

It's been one of retail investors favorite stocks since the start, but it's been a bumpy road for Palunteer. Where is the stock heading next? Marketbeat analyst Chris Marott joins us today to talk about what's happening with Palanteer right now, especially ahead of their earnings report coming up in just a week or two. Chris, there's a lot to cover in this video today with an update on Palunteer. It's been a few months since we've talked about this stock. The reason we've had so many viewers asking about an update is because we saw a really big downtrend. the stock hit new lows that we we'd seen for a while, but then it bounced back up and now it seems to be struggling again this week. So, let's talk a little bit about what's behind all of this price action in Palunteer. >> Well, I think there's a couple of different ways investors can look at it. There's the pessimistic way, which I think a lot of uh Palunteer bears want to uh push for, and that is that well, the stock was up over 100% in the last year. Why isn't it doing that again? If it was such a great stock, it would be doing that again. I think the more realistic way to look at it and the way that I've looked at it all year is the fact that what you're seeing right now is a is a healthy consolidation period. You and I talked about Palunteer late last year and Palanteer was going up uh close to $200 a share. Then it crossed over $200 a share and I said there's going to be a pullback at some point. Um much like investors in physical precious metals were kind of looking at gold and celebrating, hey, gold's up at $5,000 an ounce, but we all knew that it's going to pull back. It that's wasn't sustainable. Pal talent here at $200 at that point in its business cycle that wasn't sustainable. It's pulled back and this is a healthy pullback. I do think what you're seeing, Bridget, and I think what the chart clearly shows, this isn't what Chris Marcotch believes, this is what the chart is clearly showing, is that the stock is in a consolidation range, it's showing a very defined support range in that area of $128 to $130. Buyers are stepping in there. They're not letting the stock go below that level. Now, the question is, how high is the ceiling in the short term? That is the question that everybody wants to know is where could the stock be going next? How high could it go? Is now a time to be adding more? Is the downtrend going to continue? I think those are the the fears and the questions so many people have and we're going to get into some of that throughout this video. So, I want to pivot from talking about the price action to talking about the actual company and the contracts and the money that's coming in and really the growth that it's seen. This is what had investors so excited who got in early on Palunteer a few years ago. Again, looking at the stock, it's had tremendous growth, up over 500% in the last 5 years, but it has slowed down in the last year, but it does seem like money is still flowing in. Let's look at those contracts. What did they announced recently? >> Let's go back to July of last year. There was a $10 billion contract that it signed with the Army for an army enterprise agreement. The Maven program is proving that Palunteer is becoming the operating system for the entire US government, not just the defense department. They just signed a $300 million contract this week with the USDA. Those are all on the government side, the public side. You've also got Palunteer continuing to sign contracts on the commercial side in the private sector and investors are going to learn more about that when Palanteer reports earnings which is coming up on May 4th. >> Yeah, there's a lot of pressure riding on what happens with that earnings report for Palunteer because that's always been the discussion with this company is is this valuation is the cost of this stock worth what they're actually bringing in the door. So far, let's go back it up to the last earnings report. Did we see any kind of proof in the pudding? Did we see any kind of reaction with the stock at that point? And what could we expect coming up in the next couple of weeks when they report this next quarter's earnings? >> Yeah, so Palanteer delivered a great earnings report. The report came out on February 2nd. Um they they beat on earnings. It wasn't a huge beat, but it was a couple of cents and they did beat on revenue. The market has become somewhat conditioned to that idea of Palunteer going to beat. And actually the stock got a little bit of a lift after earnings and then it went right back down again. Um and some of that was because of the narrative that's going around about software. AI is going to eat software that's been accelerating in the last couple of months with Michael Bur having announcing that he's put out put options on Palunteer and then also that this idea that Anthropic is going to take away contract revenue from Palunteer. So the stock's been under pressure, but that's been a lot of noise and I don't think any of th that information really affects Palunteer's business model. Again, I will come back to I see this as a healthy correction that's going on in Palunteer. It's trading in a range. I don't know when it's going to break out of that range or if earnings are going to be the catalyst for that. But what I do know is again buyers have stepped in at around the 128 130 mark which seems to suggest that that's a good floor for Palunteer. Institutions continue to buy the stock and analysts continue to to maintain or raise their price targets for the stock. >> Yeah, the analyst piece of Palunteer has always been one of the most interesting because they've never quite kept up with the price action on this stock and we know the retail uh investors definitely had a role in that. But Chris, what really stood out to me from what you just said is the bear's argument about the AI impact on Palunteer. We all know this AI story isn't going away. It's only growing and getting bigger. And investors shouldn't be ignoring that AI story either. We have a brand new report that just came out today on seven AI stocks every investor should be buying right now. You can scan the QR code or click the link in the description to get that. Again, brand new report totally free right now on marketbeat.com. It's an offer just for our YouTube viewers. But Chris, let's get back to AI and what it means for Palunteer. Palanteer's really been sucked into that software story where all of the bears out there are saying AI is going to eat up some of the demand for Palanteer services. What's your take on that? >> My short answer would be that Palunteer's architecture is structurally different than what you're talking about with Enthropic. This is a case where you're you're not comparing apples to apples. you're comparing apples to something else, but they're not apples. So, to provide a little bit more color on that, because I I don't want to just gloss over it for investors. So, a company like Anthropic and OpenAI, they're model producers. That's what they do. That's their that's their business model. Palunteer is an operating layer that sits on top of those models. The idea that anthropic and open AI are really threats, that's not really true. In fact, if you have stronger models from Anthropic and Open AI, that actually strengthens the need for Palunteer's AIP platform. It doesn't weaken it. It strengthens the need for Gotham. It strengthens the need for Foundry. It doesn't weaken it because Palunteer isn't rides above the LLMs. That's something that um that Palunteer has made clear from the on from the outset is it's agnostic as far as what LLM companies choose to use because it it's operating on a on a level above that. >> Yeah. I heard another uh very popular Palunteer bull on YouTube describe it as talking about yes, you can you can paint with a toothbrush, but you're not going to choose to paint with a toothbrush. And I think that analogy is is so interesting when you look at what Palanteer's framework has to offer. >> I love that analogy, Penny with toothbrush. Where he's going at with that is Palunteer Bear could push back on me and say, "Well, companies, enterprise companies could choose to build that operating layer themselves. They don't need Palunteer to do that. But so far, we're not seeing any indication that Palunteers losing customers once they get them. Based on the data that we've been seeing in their earnings reports, they've been adding customers. And once customers convert to Palunteer, they're very unlikely to switch. the switching cost becomes extreme because Palunteer is proving that they're not only delivering results for businesses, but they're delivering results that are doing exactly what businesses are looking for them to do, which is to help save them money, to help make help them make better, insightful business decisions. So, Palunteer is succeeding because it's delivering for their customers and giving the customers what they need. >> Yeah. And that is a metric we look at with almost every company. It's a any user-based company, you're looking at, are they adding users? And once those users come on, are they staying with the company? And Palunteers seems to be doing very, very well in that aspect. Not only just staying with the company, but potentially growing how much they're using Palunteer services. That's a great metric to look at and I think it shows up in their financials. That's what I wanted to talk about next with Palunteer. I think bulls love to look at Palunteer's financials because it's pretty strong. >> It it is. I mean, you look at the rule of 40 score, it's just insane. But the thing that investors need to see with Palunteer and are continuing to see with Palunteer is to me, it's not any one specific earnings report. It's the consistency of the earnings reports. They're not just doing this one quarter. They're doing this quarter after quarter after quarter. Now the people that argue about Palunteer's valuation will say well yes but Palanteer needs to keep doing that for another 5 years to justify their valuation. I don't know if they can. I don't know if they can't. This is where the Palunteer conversation becomes uh very real and I think this is where investors need to understand where Palunteer is. Um, the disappointment that I could tell people is if you're looking for Palunteer to make a move like it did from $20 to $200 in the span of a few years, yeah, that's not likely to happen. My bull case for Palunteer, my bullishness about Palunteer, and I've said this before, Bridget, but it bears repeating for anybody that hasn't heard me say this before. When I'm talking about being bullish about Palunteer, I'm talking about someone who's planning on owning Palunteer for 3 years, 5 years, or longer. So, I don't really care what's happening with Palunteer today or in 5 months. I'm thinking about where I believe Palanteer is going to be in 5 years. And I don't see anything right now that tells me Palanteer isn't going to be worth significantly more than around $140 a share, which is where it's at around that when we're taping this right now and where I believe it's going to be in about 5 years. I think it's going to be significantly higher. That is an opinion that's not only my opinion. It's shared by a lot of other people. And there are other people that take the other side of that argument. They say it's going to go down to $60 or less. I don't think that argument has a lot of validity to it, but that's the other side of the argument. In the meantime, if you're looking to get in on Palunteer, I think you need to look at what's happening right now. And the chart's not lying to you. It's trading in a fairly defined range. It's had a pullback from the, you know, from where it was trading at 200 215. And that was expected. That's not something I'm going to sit there and say caught me by surprise. It was expected that it went down. It's got some headwinds going on to it that are um I don't think that affect the business, but it's something that investors have to deal with and the stock's kind of chopping around right now. That could last a little while longer. I don't know. But what I'm saying is the opportunity is still there in Palunteer if you believe as I do that the company's going to be worth significantly more in 3 to 5 years than it is right now. >> Yeah. You've always been a long-term approach looking at Palanteer that has paid off so far for the the company for sure. Again, looking at that 5-year stat of 500% growth in 5 years. Could that happen again in the next 5 years? Do you expect that amount of growth for this company long term? >> Yeah, I'm not sure if it's going to be 500%. I mean, that would be, you know, just doing the math in my head, that's over $700 a year. I don't I don't know if we're heading there, but I certainly think there's if you're looking at buying Palunteer around $140 right now, you're looking at what some of the highest price targets are just for the next 12 months you're seeing are around 215 230. So, could I see Palunteer getting up north of 250 in 5 years or north even higher than that? Yes, I can. Now, they have to deliver. They have to execute. That's true. And I've always told you, Bridget, if my position on Palinger changes, you'll be the first to know. But right now, the proof has been in their performance and the per there's nothing that I've been seeing in the performance that tells me that there's something to be concerned about. Palunteer has may have a valuation problem for some investors, but it doesn't have a business problem. And until the business problem and the valuation problem collide, I'm still saying look at where the analysts are targeting. Look at what institutions are doing. That's your signal, not what random retail investors might be doing. Look at what institutions are doing. Look at what analysts are saying about it. >> A level-headed approach to looking at Palunteer for sure. I do want to talk a little bit about competition. In the past, we've really kind of said, or you've kind of said, Palanteer doesn't have a lot of competition. there's not a lot of companies doing what Palanteer is doing at the level it's doing that. Is that still true today or are there some other companies really entering the race and entering this space that are starting to be true competitors for Palunteer? >> I know there's a lot of retail investors who really are very high on BBAI and think that BBAI is going to present a threat to them in the public sector. I don't really think that's the case now. I just don't think BBI has the scale. um it's possible they could get a government contract or two um and and that would be good for those investors, but I don't necessarily think that you're talking about companies that are on the scale of Palunteer. I don't see it right now. And I think the thing that people have to be thinking about, especially as it relates to Palanteer's government contracts, and this goes back to the anthropic story a little bit, you've already heard just this year the Pentagon take a very measured approach about AI and they're being very careful about which foxes they're letting into the hen house. And so Palunteer's already there. So that is a big feather in the cap of Palunteer as far as other competitors encroaching on the space because Palanteer is already there. Palunteer is already established. Now with the commercial contracts, it could be different. But again, I'm not seeing a company positioned and is scaling as fast as what Palanteer has been doing on the commercial side of the business because that's where a lot of the growth has been, especially in the past two or three years. The commercial side has grown incredibly. >> All right. So that's your take on Palunteer competition. Now let's move on to Palunteer's CEO. This has been a little bit of controversy this week especially. Let's talk about that manifesto post. >> The interesting thing to me about the manifesto post was that actually the price action in the stock went up immediately after the post went out. So, I know that there's a lot of things that people read about in that uh in the manifesto post that are distasteful to them, but there's really nothing that I read in that that is anything you haven't heard from Alex Karp in the last 3 to 5 years that I, you know, that I've been following the company. Um, these are things that he believes in. Uh there are things that he's structured the company around particularly with the idea of defending western culture and defending western cultural values. Um again I that's distasteful to some people but I don't think it significantly moved the stock or if it did move the stock it moved the stock in a positive direction. If anything he's a lightning rod. I haven't noticed in particular that Karp is active on social media in terms of actively promoting himself. He does uh appear on all of their earnings calls. He gives speeches from time to time here and there and I see those being reposted on social media. But in terms of seeing Karp himself make a lot of promotional posts or things that are going to goose the stock. I I don't I don't see that. Like I said, having said that, he's a lightning rod. He has strong convictions. And what can I say? There's a lot of CEOs of a lot of companies that have strong convictions. >> Yeah. And I I I know this has been the debate. This is what has made Palanteer such a controversial stock is that people who disagree with Palunteer's entire business are probably have not made it this far along in the video. They're not they're not interested in this company. They're never going to invest in the company based on principles. And that is absolutely okay. And that's I think how you should invest. If you don't agree with the company and what they're doing, this is not the video for you. This is not the stock for you. But for those who are bullish on Palanteer's future, I I I agree with you, Chris. I don't know that this post, this post on X that had, you know, 30ome million views, this manifesto post is going to have a negative impact for those who are already investors in Palanteer because they likely agree with that manifesto. So, it's not surprising that the stock had a positive jump on that. The one thing with KARP that I still think some investors who are pro Palunteer investors still struggle with is Karp's selling. He's sold billions of dollars of Palunteer stock over the last few years. Is that a concern to you? >> Um, no, not really. Um, I I I would say again, people will always talk about the amount of insider selling that happens with Palunteer. Um, Palunteers may know secret about it. stock-based compensation is a significant part of the revenue that the compensation package for their executives and for a person like Alex Karp and people like Alex Karp have things that happen and they need to sell stock and they need liquidity and they can get it from the company stock. It's a part of their compensation package and they're entitled to do it. I would suggest to people that Palunteer was selling a lot of shares and Karp was selling a lot of shares three years ago and look at where the stock is now. The proof is in the performance of the company and not so much in the noise of executives selling shares. Maybe it happens with Palunteer on a more exaggerated basis or more obvious basis, something that investors notice more, but it happens. >> Oh, we covered a lot of ground on Palunteer today. Chris, thank you so much for the update on what's happening with the stock. If you do care about what insiders are doing, whether they're buying or selling, make sure to check out this video with Thomas Hughes. It just posted on Friday if you missed this one. These are three tiny stocks that insiders are buying heavily right now. All in the AI and tech field. So, they could be some up andcoming names.