The UNTHINKABLE is About to Happen to Palantir Stock

Palantir (PLTR): Summary

Tom Nash argues that Palantir’s business results are accelerating even as its shares sell off. He sees the gap between business performance and market pricing as a buying opportunity. His central thesis is that investors should focus on improving fundamentals and long-term growth rather than short-term sentiment or headline valuation multiples.

Palantir results and valuation figures cited

• Revenue growth: 96% year over year, which Nash describes as the highest in the company’s history. Quarterly revenue growth was also cited at 20%, with revenue of $2.3 billion.
• U.S. commercial business: Reportedly grew 148% year over year and 29% quarter over quarter, from $397 million a year earlier to $984 million. Elsewhere, Nash characterizes U.S. commercial growth as about 50% per year.
• Management outlook: Nash says CEO Alex Karp discussed a goal of $15 billion in U.S. commercial-segment revenue by 2028.
• Other operating metrics: Nash cites 158% Rule of 40, 165% net dollar retention, and 144% EPS growth.
• Profitability: Net income reportedly rose from $476 million to $1.13 billion in a year. EPS was cited at $0.44. Operating profit was described as $1.08 billion, up 175% year over year from $393 million and up 19% quarter over quarter. Separately, Nash compares operating profit of $120 million in 2023 with $3.3 billion over the trailing 12 months.
• Margins and customer spending: He cites a 60% adjusted operating margin, 56% free-cash-flow margin, and 76% year-over-year spending growth among the 20 largest customers.
• Balance sheet: Total debt was cited at $225 million, down 4% year over year; cash was $2.5 billion, up 64%. Nash says cash is roughly five times debt.
• Valuation: Forward P/E was cited at 51.6, down about 31% from roughly 112 a year earlier. Price-to-sales was cited at 56, down 46.7% from a year earlier. Nash acknowledges that this remains a premium valuation and says the P/S multiple had fallen from 365 to 56.
• Market-cap comparison: Nash says market capitalization rose only 4.4% over 12 months, while revenue and operating profit rose much faster.
• Deal activity: In the latest quarter, Palantir reportedly signed 212 deals worth at least $1 million, including 107 above $5 million and 64 above $10 million.
• Stockshippy score: Nash’s Stockshippy platform gave Palantir 98/100. He says the two-point deduction reflected institutional ownership being 2% below the platform’s benchmark.

Investment thesis and framework

Nash’s approach is to compare business progress with the share price rather than judging valuation multiples in isolation. He recommends looking for companies with rapidly improving revenue, profits, margins, and customer activity, then comparing that progress with changes in market capitalization and valuation multiples. He argues that multiples can compress as earnings grow, making a company cheaper relative to its expanding business even if its shares still look expensive on headline measures.

He distinguishes business deterioration from a selloff driven by sentiment, assumptions, or profit-taking. In his view, those factors—not weakening Palantir operations—explain the decline. He also points to customer retention, rising customer spending, switching costs, network effects, and product differentiation as evidence of a competitive “moat.”

Nash argues that falling AI costs could expand adoption and the total addressable market—a version of Jevons’ paradox. He says cheaper AI may benefit software platforms such as Palantir, as well as computing hardware, even if it reduces the relative importance of some language-model providers.

He portrays Palantir’s software as helping large companies deploy AI with data control, security, compliance, flexibility to use multiple AI models, and lower operating costs. He argues these features can reduce reliance on external LLM providers and make the platform difficult to replace.

Price history, forecast, and risks

• Nash compares the current setup to 2022, when he says Palantir fell from about $40 to $7 and stayed near $7 for much of the year while the business improved. He says the shares later rose from $7 to about $200.
• He recalls discussing Palantir in 2023 when it traded at $18.89, after rising about 155% in six months.
• His stated 2030 price target is $978 per share, which he says represents 431% upside under assumptions including roughly 80% income growth, a 55 P/E, and a 46% net margin. He calls this “conservatively optimistic.”
• He says he plans to earn at least 49% annually over the next four years from the stock. These are the presenter’s projections and personal expectations, not guaranteed returns.
• He cites the stock’s roughly 600% gain over five years as a reason some investors may take profits.
• He also points to concerns about valuation and whether growth has peaked, as well as broad pressure on technology, AI, and growth stocks. He cautions against treating assumptions about peak growth as facts.

Recommendation

Nash says that when a company’s fundamentals improve while its share price falls for reasons unrelated to its business, he views the decline as a buying signal. He is strongly bullish on Palantir while acknowledging that its valuation remains high.

Data and wording caveat

The subtitles contain some potentially inconsistent figures or time references. For example, they describe a 30% post-results share decline but later discuss a 3% daily move, and give differing descriptions of U.S. commercial growth. Figures above are presented as Nash cited them, not independently verified.

Disclosure

The video description says the content is for educational and entertainment purposes only, is not financial, tax, or legal advice, and is not a solicitation to invest. It advises viewers to do their own research and consult an independent licensed professional.

Presenter and sources

Presenter: Tom Nash

Other named sources or references: Alex Karp (Palantir CEO and earnings-call comments), Peter Lynch (quoted by Nash), Stockshippy.com (Nash’s analysis platform), and Nash’s 2023 post on Twitter/X. The video also references Nvidia (NVDA) as a past investment call.