Cryptocurrencies, gold and Nvidia (NVDA:NASDAQ) have all been going gangbusters lately, but if it’s momentum you’re after, you don’t get any hotter than Palantir (PLTR:NASDAQ), the company co-started by prominent Silicon Valley entrepreneur Peter Thiel, a co-founder of PayPal (PYPL:NASDAQ), Founders Fund and an early investor in Facebook, now Meta Platforms (META:NASDAQ).
Shares in the company have increased 10-fold from May 2024 to an all-time high above $80 and are trading just a smidge below that despite some DeepSeek-related volatility. Notably the company has earned a place in the S&P 500 but can the stock maintain its momentum in 2025?
The latest earnings, for the fourth quarter to 31 December, on 3 February will provide clues, with the fourth-quarter and full-year EPS (earnings per share) consensus pitched at $0.11 and $0.38 Q4 on $778.9 million and $2.8 billion revenues.
US commercial growth will be crucial, seen as the long-run growth driver of the business. ‘The commercial sector is the growth story for the company as it expands beyond government clientele,’ wrote Beth Kindig, lead tech analyst at the IO Fund.
The commercial segment continued its to perform in Q3 with 13% quarter-on-quarter and 54% year-on-year revenue growth.
Palantir has been particularly keen to talk up the impact of its Artificial Intelligence Platform in various sectors, such as insurance and rail, delivering significant operational improvements and financial outcomes, including reducing underwriting response times from two weeks to just three hours.
Exciting times, but at a price – according to Stockopedia, the 12-month rolling PE (price to earnings) multiple is a jaw-dropping 166 times, which looks stretched to say the least.
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