Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Palantir Technologies Inc. (NASDAQ:PLTR) CEO Alex Karp reportedly held confidential meetings with top executives from major South Korean conglomerates to discuss AI strategy, as the software company bets on the growth of its platform. Secret AI Talks With Top Korean Executives Karp met with executives from four major South Korean companies during Tuesday’s “AX Leaders Summit” hosted by KT Corp (NYSE:KT) in ...

Core Insights - The largest tech companies are investing heavily in data centers to support the growing demand for artificial intelligence (AI), with Morgan Stanley estimating long-term efficiencies from AI could be worth $40 trillion [1][2] Group 1: Palantir Technologies - Palantir Technologies is benefiting from the increasing adoption of AI, with its platform integrating deeply into company operations to convert data into actionable insights [3] - The company has transitioned from a defense contractor to a successful player in the commercial market, exemplified by Citibank reducing customer onboarding time from days to seconds and Fannie Mae detecting mortgage fraud almost instantly [4] - Palantir signed a 10-year agreement with the U.S. Army worth up to $10 billion, nearly tripling its trailing-12-month revenue of $3.44 billion [5] - In Q2, Palantir reported a 48% year-over-year revenue increase, up from 39% in the previous quarter, with expectations of accelerating to 50% in Q3 [6] - The company has a high valuation with a price-to-sales multiple of 136, and it reported a profit margin of 33% in Q2, comparable to Microsoft [7] - CEO Alex Karp believes revenue can increase 10x with fewer employees, potentially achieving this within seven years, with a market cap projection of $1 trillion by 2028 [8] Group 2: Nvidia - Nvidia is a leading player in the AI boom, with its chips being essential for competitive data centers, offering a complete stack of solutions across processors, networking, and software [9] - The company's data center revenue grew 56% year-over-year, driven by demand from cloud service providers and AI model builders [10] - Nvidia's networking solutions, which accounted for 15% of its revenue last quarter, grew 98% year-over-year, showcasing its competitive advantage [11] - The launch of NVLink Fusion allows integration of custom chips from other semiconductor companies, expanding its addressable market [12] - Nvidia's CUDA software has doubled its developer base to 5.9 million over the last three years, solidifying its position in the GPU market [13] - Despite its stock performance, Nvidia is considered a solid investment with a forward price-to-earnings multiple of 30, indicating it may still be undervalued [14]

Core Insights - Palantir Technologies has seen a remarkable stock price increase of approximately 630% since the beginning of 2024, making it one of the top performers in the market [1] - The company has demonstrated significant growth in both government and commercial revenue, with government revenue growing 45% year over year to $487 million and commercial revenue increasing 33% to $397 million in Q1 [5][6] - The valuation of Palantir's stock is considered extremely high, with revenue growth of only 40% compared to the stock price increase, indicating a potential risk for investors [8][10] Company Performance - Palantir's platform excels in providing AI solutions, transforming business operations for clients like Wendy's and Heineken, significantly reducing the time required for complex tasks [3][4] - The company initially focused on government clients but has successfully expanded into the commercial sector, with U.S. commercial sales growing at an impressive rate of 71% year over year [5][6] Valuation Metrics - Despite the stock's substantial rise, Palantir's valuation metrics suggest that the stock is overpriced, with forward P/E and P/S ratios indicating a high premium [10] - If Palantir achieves projected revenue of $20 billion and profits of $6 billion in five years, it would still be valued at 14 times sales and 48 times earnings, which are typical for growth stocks [10][11] - The assumption that Palantir can sustain high growth rates and profitability margins is critical, but the current stock price reflects an expectation of significant future growth that may not materialize [12]