Latest news with #PalantirTechnologies'
Straits Times
16 hours ago
- Business
- Straits Times
Palantir's 2,500% stock rally has bulls scrambling to justify valuation
Shares of the defense maker closed at another all-time high on Aug 8, bringing gains since its 2021 debut to near 2,500 per cent. NEW YORK – Palantir Technologies' meteoric rise is pushing the company's valuation further into record territory, forcing bullish investors to bank on increasingly robust future growth to justify its current level. Shares of the defense maker closed at another all-time high on Friday (Aug 8), bringing gains since its 2021 debut to near 2,500 per cent. The stock is up almost 150 per cent in 2025, a rally underpinned by the company's growing use of artificial intelligence, business ties to the US government and most recently, a stellar earnings report. That surge has made Palantir eye-wateringly expensive compared to its peers: trading at 245 times forward earnings, it is the most richly-valued company in the S&P 500 Index. By comparison, chipmaker Nvidia, another big gainer, trades at just 35 times forward earnings. Palantir is 'turning into a bit of a difficult valuation story to sell, but it's a great company,' said Mark Giarelli of Morningstar Investment Service, who has sell-equivalent rating on the stock. The valuation 'causes heartburn, but that's the story right now.' Plenty of Wall Street pros and retail investors alike are happy to hang on for now, wary of missing out on further upside. Still, it's getting hard for them to ignore the increasingly high bar Palantir must meet to justify its performance over the longer term. Damian Reimertz of Bloomberg Intelligence estimates the company would need to generate US$60 billion (S$77 billion) over the next 12 months to trade at a comparable valuation to its peers. That calculation – based on a comparison of the software companies' enterprise value-to-sales ratio – is many times higher than the US$4 billion in revenues Wall Street expects Palantir to earn in fiscal 2025 or the US$5.7 billion analysts forecast for next year. Valuation is also a sticking point for Gil Luria, managing director and head of technology research at DA Davidson & Co. Mr Luria praised Palantir's quarterly results and called it 'the best story in all of software' in a recent note. Top stories Swipe. Select. Stay informed. Business Keppel to sell M1 unit's telco business to Simba for $1.43 billion Business Nvidia, AMD agree to pay 15% of China chip sale revenues to US: Sources Singapore Healthy lifestyle changes could save Singapore $650 million in healthcare costs by 2050: Study Singapore BTO income ceiling, age floor for singles being reviewed: Chee Hong Tat World Netanyahu says Israel's new Gaza offensive will start soon Opinion Anwar's government: Full house but plenty of empty offices Singapore Man's claim amid divorce that his mother is true owner of 3 properties cuts no ice with judge Business Singapore can deliver and thrive in a fragmented global economy: Morgan Stanley analysts But he estimates that the company would have to grow at 50 per cent annually for the next five years and maintain a 50 per cent margin in order to get its forward price to earnings ratio down to 30, in line with the likes of Microsoft and Advanced Micro Devices. In a broader sign of Wall Street's unease, more than twice as many analysts assign the stock sell or hold ratings than buy, according to data compiled by Bloomberg. Still, Palantir's shares have become a must-own for portfolio managers concerned with beating performance benchmarks, said David Wagner of Aptus Capital Advisors, which holds shares of the company. 'There's a lot of investors that just can't ignore it,' said Mr Wagner. 'They don't believe in the stock, but they're tired of it just hurting them on a relative performance standpoint.' 'Squint your eyes' Palantir bulls are betting that the company's business performance will support its stock price over the long term, a path taken by many of today's Big Tech elite. Online streamer Netflix, for instance, traded north of 280 times forward earnings at a 2015 peak, and now stands at a forward P/E of 40. 'Definitely Palantir is part of that AI craze, but not everything that goes to a valuation of 200 is a bubble,' said Que Nguyen, chief investment officer of equity strategies at Research Affiliates, referring to Netflix. Brent Bracelin at Piper Sandler boosted his price target on shares to US$182 from US$170 following earnings and maintained his overweight rating. He is counting on the company to continue growing aggressively and sustain high free cash flow margins through 2030, aided by a market for defense spending estimated at US$1 trillion in the US alone. 'You have to squint your eyes. You kind of have to believe that these audacious growth goals can be achieved,' he said. BLOOMBERG
Business Times
18 hours ago
- Business
- Business Times
Palantir's 2,500% run has bulls scrambling to justify valuation
[NEW YORK] Palantir Technologies' meteoric rise is pushing the company's valuation further into record territory, forcing bullish investors to bank on increasingly robust future growth to justify its current level. Shares of the defence maker closed at another all-time high on Friday (Aug 8), bringing gains since its 2021 debut to nearly 2,500 per cent. The stock is up almost 150 per cent this year, a rally underpinned by the company's growing use of artificial intelligence (AI), business ties to the US government and most recently, a stellar earnings report. That surge has made Palantir eye-wateringly expensive compared to its peers: trading at 245 times forward earnings, it is the most richly valued company in the S&P 500 Index. By comparison, chipmaker Nvidia, another big gainer, trades at just 35 times forward earnings. Palantir is 'turning into a bit of a difficult valuation story to sell, but it's a great company', said Mark Giarelli of Morningstar Investment Service, who has a sell-equivalent rating on the stock. The valuation 'causes heartburn, but that's the story right now'. Plenty of Wall Street pros and retail investors alike are happy to hang on for now, wary of missing out on further upside. Still, it's getting hard for them to ignore the increasingly high bar Palantir must meet to justify its performance over the longer term. Damian Reimertz of Bloomberg Intelligence estimates the company would need to generate US$60 billion over the next 12 months to trade at a comparable valuation to its peers. That calculation, based on a comparison of the software companies' enterprise value-to-sales ratio, is many times higher than the US$4 billion in revenues Wall Street expects Palantir to earn in fiscal 2025 or the US$5.7 billion analysts forecast for next year. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Valuation is also a sticking point for Gil Luria, managing director and head of technology research at DA Davidson. Luria praised Palantir's quarterly results and called it 'the best story in all of software' in a recent note. But he estimates that the company would have to grow at 50 per cent annually for the next five years and maintain a 50 per cent margin in order to get its forward price to earnings ratio down to 30, in line with the likes of Microsoft and Advanced Micro Devices. Palantir's adjusted earnings per share are expected to grow at a 56 per cent rate this year, falling to 31 per cent and 33 per cent in the next two years, respectively. In a broader sign of Wall Street's unease, more than twice as many analysts assign the stock sell or hold ratings than buy, according to data compiled by Bloomberg. Still, Palantir's shares have become a must-own for portfolio managers concerned with beating performance benchmarks, said David Wagner of Aptus Capital Advisors, which holds shares of the company. 'There's a lot of investors that just can't ignore it,' said Wagner. 'They don't believe in the stock, but they're tired of it just hurting them on a relative performance standpoint.' 'Squint your eyes' Palantir bulls are betting that the company's business performance will support its stock price over the long term, a path taken by many of today's Big Tech elite. Online streamer Netflix, for instance, traded north of 280 times forward earnings at a 2015 peak, and now stands at a forward P/E of 40. 'Definitely Palantir is part of that AI craze, but not everything that goes to a valuation of 200 is a bubble,' said Que Nguyen, chief investment officer of equity strategies at Research Affiliates, referring to Netflix. Brent Bracelin at Piper Sandler boosted his price target on shares to US$182 from US$170 following earnings and maintained his overweight rating. He is counting on the company to continue growing aggressively and sustain high free cash flow margins to 2030, aided by a market for defence spending estimated at US$1 trillion in the US alone. 'You have to squint your eyes. You kind of have to believe that these audacious growth goals can be achieved,' he said. Of course, there are numerous examples of stock rallies that cooled when companies could not meet Wall Street's elevated expectations. Shares of Tesla are down nearly 20 per cent this year, in part because the company's results are not keeping pace with its lofty valuation of about 148 times forward earnings. While Palantir aced its most recent earnings report, its high valuation could exacerbate a selloff if the company stumbles in the future, said Morningstar's Giarelli. 'Palantir is trading at such a high multiple relative to everyone else that there's just so much gravity underneath their stock chart,' he said. 'There's a lot of room below the stock chart for it to reprice in a negative way because it's had such a stellar run.' For Mark Malek, chief investment officer at Siebert Financial, valuations remain a concern. Still, Palantir's potential for growth has kept him holding on to the stock. 'It's uncomfortable to buy it at these levels, but we're not afraid to buy when stocks are overvalued,' he said. 'Where else are you finding 30 per cent growth rates out there?' BLOOMBERG
Bloomberg
6 days ago
- Business
- Bloomberg
Trump Urges India Stop Buying Oil From Russia, Palantir Hits Record Revenue
Indian Prime Minister Narendra Modi's government hasn't given India's oil refiners instructions to stop buying Russian oil, and no decision has been taken on whether to halt the purchases, people familiar with the situation told Bloomberg, asking not to be named due to the sensitivity of the matter. Palantir Technologies' unstoppable rally the past year has yielded more than sixfold gains for investors. The firm reported a 48% increase in second-quarter revenue as it topped $1 billion in a quarter for the first time, saying artificial intelligence was having an 'astonishing impact' on its business. The Opening Trade has everything you need to know as markets open across Europe. With analysis you won't find anywhere else, we break down the biggest stories of the day and speak to top guests who have skin in the game. Hosted by Kriti Gupta, Oliver Crook and Valerie Tytel. (Source: Bloomberg)
Yahoo
18-07-2025
- Business
- Yahoo
Which Will Come First: Palantir Technologies Hitting $1 Trillion or Nvidia Reaching $5 Trillion?
Key Points Nvidia's products have been crucial for companies building next-gen artificial intelligence models. Palantir Technologies' data analytics software helps clients improve efficiency and solve pressing problems. Both stocks have been growth beasts in recent years. 10 stocks we like better than Nvidia › Nvidia (NASDAQ: NVDA) and Palantir Technologies (NASDAQ: PLTR) have been two of the most popular stocks for tech investors to own in recent years. Since 2023, both are up by more than 1,000%, with Palantir's gains of over 2,000% leading the way. If it had started that period as a smaller company, then perhaps Nvidia's gains would have been superior. But today, it has grown to a market cap of $4.2 trillion, making the chipmaker the most valuable company in the world. Palantir has a market cap of about $360 billion, just a fraction of Nvidia's size. Both of these stocks still look to be popular among retail investors, but which scenario is more likely to happen next: that Nvidia will hit $5 trillion, or that Palantir will hit $1 trillion? The case for Nvidia For Nvidia to hit the $5 trillion milestone, it would need to rise by another 19% from where it is today. That doesn't seem like a big stretch for a tech stock that has already delivered such life-changing returns to investors in recent years. And with the company still dominating the AI chip market and demand for its products remaining high, it's an entirely plausible scenario to envision. The more pertinent question is likely when, rather than if it will happen. Nvidia's valuation, while high, isn't extreme when you consider its earnings growth. The stock trades at a forward price-to-earnings (P/E) multiple of 38, based on analysts' estimates. But with profit margins in excess of 50% and with a lot more AI-fueled growth on the horizon, it's hard not to like Nvidia's chances of reaching $5 trillion in market cap sooner rather than later. If the market remains strong and the economy is in good shape, then I don't think it's unreasonable to expect Nvidia to cross the $5 trillion line before the end of next year. If excitement about AI ramps up further, there's a chance that it might even hit that milestone earlier. The case for Palantir For Palantir to reach $1 trillion, it would need to nearly triple in value from where it sits today. That's no easy task. But in just the past year alone, the data analytics stock has surged by around 430%. Palantir has also been playing a key role in the AI sector, as it offers customers platforms that help them analyze large volumes of data and improve their decision-making processes. It often lands new clients via its "boot camps," where it brings potential customers in and demonstrates how its tools can be applied to their real-world problems. That strategy has been paying off with impressive growth. This year, the company expects revenue of around $3.9 billion, which would be an increase of 36% from 2024. The stock looks incredibly expensive, trading at a forward P/E of 260. But that actually works in Palantir's favor as investors appear to be looking past traditional valuation multiples and simply focusing on the perceived growth opportunities ahead for the business. As a trusted partner of government agencies around the world, Palantir is positioned to benefit from increases in spending on defense, which President Donald Trump has been pushing for among U.S. allies. If those nations commit to higher defense spending, that could be a positive catalyst for Palantir, and help push its share price higher. Which stock will hit its next milestone first? Both of these AI stocks have been phenomenal investments in recent years. But I believe Nvidia will hit $5 trillion before Palantir reaches $1 trillion. Palantir's lofty valuation is based too heavily on speculation and hype among retail investors. That leaves it much more vulnerable to a significant sell-off, especially if the economy shows signs of slowing down. When enthusiasm is high and speculation is rampant, Palantir's stock performs well, but earlier this year, in April, after Trump first announced his "reciprocal" tariffs against nearly every U.S. trading partner, the stock slumped to less than $80, dropping its market cap back to the neighborhood of $180 billion. Nvidia makes for the better all-around investment. Its fundamentals are solid, it has a dominant position in the AI chip market, and while its valuation is high, it's still much easier to justify than Palantir's speculative price tag. Should you buy stock in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,415!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy. Which Will Come First: Palantir Technologies Hitting $1 Trillion or Nvidia Reaching $5 Trillion? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
13-05-2025
- Business
- Miami Herald
Trump's agenda on Middle East trip: Lots of deals
RIYADH, Saudi Arabia - The first time President Donald Trump visited Riyadh in 2017, he posed with a ceremonial orb, took part in a traditional sword dance and secured an agreement by Saudi Arabia to purchase $350 billion in weaponry, the largest arms deal in U.S. history. The sequel, coming eight years later - almost to the day - promises much the same in the way of pageantry and purchases, only more so. Even before the trip, Saudi Crown Prince Mohammed bin Salman vowed he would invest about $600 billion over the four years of Trump's presidency (Trump asked him to round it up to $1 trillion). And although the orb will probably not make an appearance this time around, Trump is bringing with him a phalanx of business leaders for a Saudi-U.S. business summit Tuesday - the day he arrives - that will include BlackRock Chief Executive Larry Fink, OpenAI's Sam Altman, Palantir Technologies' Alex Karp, Tesla's Elon Musk and Meta's Mark Zuckerberg. The heads of other major firms, including IBM, Boeing, Qualcomm and Alphabet, also will attend. White House artificial intelligence and crypto czar David Sacks, meanwhile, is already in Riyadh. Trump will then attend a summit with gulf leaders on Wednesday, travel to Qatar that same day and end the trip Thursday in the United Arab Emirates. There will be more gifts: The UAE has pledged $1.4 trillion in U.S. investment packages over the next decade. "Trump is there to solidify a very close relationship," said Ali Shihabi, a political and economic expert who is close to the Saudi government, adding that although he did not expect a breakthrough on security matters, the deals signed would nevertheless bring "economic ties and coordination to a very high level." Not to be outdone by its two regional competitors, Qatar is in discussions about the"possible transfer" of a luxury Boeing 747-8 to replace Air Force One. Before departing on the current Air Force One, Trump found himself defending plans to accept the gift, which is thought to cost hundreds of millions of dollars. He dismissed those with concerns over the ethics and constitutionality of the gift as "stupid people," suggesting he planned to proceed with it, a topic sure to fuel questions over his visit to Doha, the Qatari capital. Trump also visited Saudi Arabia on the first international trip of his first term, breaking a presidential tradition of visiting U.S. allies and major trade partners such as the United Kingdom and European countries. That Trump chose the gulf region as his first destination, commentators say, reflects the Mideast's growing centrality to the U.S. in terms of political and security partners. (Technically, this is not his first overseas trip since returning to the White House because he attended the recent funeral of Pope Francis.) "The gulf nations succeeded in positioning themselves in a way that lets them play constructive roles in several issues," said Hasan Alhasan, senior fellow for Middle East policy at the International Institute for Strategic Studies in Bahrain. He pointed out that Saudi Arabia has sponsored talks between Russia and Ukraine and was involved in peacemaking efforts in Sudan. Qatar is a driving force in negotiations between Israel and Hamas and has helped to stabilize Syria. Oman, which is not on the itinerary but whose leader will take part in the summit, is hosting high-level talks between the U.S. and Iran. "Trump is not tied to the protocols of other presidents. He sees an overlap in aims, whether political or commercial," Alhasan said. Israel is watching the visit with consternation on a host of fronts, expecting Trump to hear an earful from Arab governments on its continuing conflict with Hamas militants in Gaza and the role Israel is playing in the future of Syria. And Israeli officials are increasingly concerned that their voices will be drowned out as the Trump administration progresses in its negotiations with Iran over its nuclear program. Any hint from Trump that he would tolerate the Iranians continuing with a civilian nuclear program will send reverberations throughout Washington, particularly on Capitol Hill, where Republicans have long opposed allowing Iran to continue any enrichment of uranium on its soil. Trump also appears unconcerned with limits placed by his predecessors on what countries can receive from the U.S. He has reportedly revoked the AI diffusion rule, the U.S. policy intended to control the export of advanced semiconductor chips and AI, paving the way for gulf nations to ramp up their already considerable advanced chip holdings. That's especially true for the UAE, whose $1.4-trillion investment will be heavily weighted toward AI. Meanwhile, MGX, an investment fund based in the Emirati capital, Abu Dhabi, has pledged $100 billion in energy infrastructures and data centers in the U.S. to support AI. At the same time, G42, another UAE-based AI firm, has divested from Chinese companies and partnered with Microsoft in an attempt to appease U.S. lawmakers. There have also been reports that Trump will revive potential arms deals that were on the table from his first term but were never completed, including sales of F-35 fighter jets and Reaper drones to the UAE, and the co-production of advanced missiles with Saudi Arabia, said Prem Thakker, a partner with the global advisory firm DGA and a former official with the National Security Council under President Obama. Another issue on the table could be nuclear power for Saudi Arabia. President Biden made supporting a civilian nuclear program for the kingdom contingent on Riyadh agreeing to a peace deal with Israel similar to the Abraham Accords, the normalization agreements forged with the UAE, Bahrain and others during Trump's first term. Under Trump, that condition appears to have been dropped, with negotiations that could potentially allow Saudi Arabia to capitalize on its uranium reserves and a domestic enrichment program. "And this means that traditional nonproliferation concerns over Saudi Arabia have really subsided over the last few years," Thakker said. "Twenty years ago no one in the U.S. would have contemplated such an agreement." The trip dovetails with a raft of investments involving the Trump Organization. Its real-estate development arm, which is led by Trump's son Eric, has announced since last year construction projects across the gulf region, including a $2-billion golf course in Qatar, an 80-story hotel and residential tower in Dubai and two Trump towers in Saudi Arabia - one in Riyadh and one in Jeddah. Though the deals appear gargantuan, experts say financial realities will cut them down to size. Many point out that Saudi Arabia's investments during Trump's first term did not reach the $450 billion he mentioned (the figure includes nonmilitary spending). Even the most generous of calculations would put the Saudi investments at less than $300 billion, experts say. Though its investments in the U.S. are likely to increase during Trump's second term, Riyadh has focused much of its spending on gigaprojects such as NEOM. And current oil prices sitting below the government's break-even price of around $100 a barrel means that it will be running a deficit, said David Butter, a Middle East energy expert at Chatham House, a think tank in London. He added that the Saudi government and its colossal sovereign fund, the Public Investment Fund, both of which own a part of Saudi oil giant Aramco, have not received performance-linked dividends for this year. The result, Butter said, is a looming financial crisis. "The investment numbers are fantasy," he said. -------- -Bulos reported from Riyadh and Wilner from Washington. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
