Palantir Stock Just Zoomed Past $150. My Prediction for What Comes Next

Core Insights - Palantir Technologies has experienced a remarkable stock performance, with a 436% gain over the last 12 months and a 2,300% return since the beginning of 2023, resulting in significant wealth creation for shareholders [1][2] - The company has a current market capitalization of nearly $350 billion, with its stock recently surpassing $150 per share [2] Revenue Growth and Profitability - Palantir's revenue grew 39% year over year to $884 million last quarter, driven by strong domestic sales, with U.S. revenue increasing by 55% and U.S. commercial revenue growing by 71% year over year [3] - The operating margin for the last quarter was 20%, with an average of 13% over the past 12 months, indicating a clear path for profitability expansion as the business scales [4] Customer Contracts and Future Prospects - In the first quarter, Palantir closed 139 deals worth over $1 million and 31 deals worth at least $10 million, showcasing strong demand for its AI operating system among large enterprises [5] - The U.S. Department of Defense has contracts exceeding $1 billion with Palantir, with potential for further expansion [5] - Palantir's annual revenue run rate has reached $3.5 billion, with expectations for significant growth in AI software spending over the next decade, potentially reaching $10 billion to $20 billion in annual revenue [11] Industry Expansion and Innovation - Palantir is actively moving into various industries, including nuclear energy, by partnering with companies to implement its software as the operating system for entire supply chains [9] - The U.S. government's push for new nuclear energy facilities could represent a substantial growth opportunity for Palantir, especially if its AI software can streamline regulatory processes and reduce costs [10] Valuation Concerns - Despite the positive business outlook, Palantir's market cap of over $350 billion results in a price-to-sales (P/S) ratio of 122.7, significantly higher than the S&P 500's P/S ratio of 3.2, indicating high growth expectations that may be challenging to meet [14] - Even with projected revenue growth to $20 billion and a 30% profit margin over the next decade, Palantir's price-to-earnings (P/E) ratio would still be nearly 60, which is more than double the long-term average of the S&P 500 [15] - The stock is viewed as potentially overvalued, suggesting that future performance may not align with its recent past [16]