Buy PLTR Amid Its Recent Softness for Sparkling Returns Over Long Term

Core Insights - Palantir Technologies Inc. reported record second-quarter earnings, with revenue surpassing $1 billion for the first time, exceeding all estimates and leading to a year-to-date stock price increase of 107.5% [1] - Despite recent stock price softness, with six consecutive days of negative closing and a 17.9% discount from its all-time high, this presents a potential entry point for investors [2][3] - The long-term earnings per share (EPS) growth estimate for Palantir is 40.8%, significantly higher than the S&P 500's 12.8% growth [3] Financial Performance - Government revenues increased by 49.2% year-over-year to $552.98 million, while commercial revenues rose by 46.6% to $450.71 million, with a total customer count of 849 as of June 30 [5][10] - Palantir raised its 2024 revenue outlook to between $4.142 billion and $4.150 billion, up from a previous forecast of $3.89 billion to $3.90 billion, with Q3 revenues projected to exceed Wall Street estimates [11][10] - Remaining performance obligations surged by 77% to $2.42 billion, indicating strong future growth potential [12] Business Model and Strategy - Palantir's commercial business is expanding alongside its traditional government contracts, driven by its aggressive ventures in AI, including the launch of its Artificial Intelligence Platform (AIP) [6][7] - AIP provides unified access to various large language models, transforming data into actionable insights, reducing reliance on government contracts [7] Future Growth Catalysts - CEO Alex Karp expressed optimism about the company's future, emphasizing ongoing investments in talent and product development [13] - The U.S. Defense industry remains a significant growth area, with substantial funding allocated to the Department of Homeland Security and the Department of Defense, creating new contract opportunities [14] Estimate Revisions - For 2025, the Zacks Consensus Estimate projects revenues of $4.17 billion (up 45.6% year-over-year) and EPS of $0.65 (up 58.5% year-over-year) [16] - For 2026, revenues are estimated at $5.56 billion (up 33.2% year-over-year) and EPS of $0.84 (up 30.5% year-over-year) [17]