Palantir's Q3 Earnings: Buy, Sell, or Just Massively Overhyped?
Alright, here we go again. Palantir, the darling of the data-mining set, is dropping its Q3 earnings report. And everyone's losing their minds trying to figure out if it's time to buy, sell, or just run screaming in the other direction. Let's be real, this company is shrouded in more mystery than a Christopher Nolan movie.
Morningstar slaps a 2-star rating on it, claiming it's "moderately overvalued" with a fair value estimate of $115. $115? Are they serious? That implies a 2025 enterprise value/sales multiple of 62 times. Sixty-two times! What are they smoking over there? (Going Into Earnings, Is Palantir Stock a Buy, a Sell, or Fairly Valued?)
The "Moat" That Ain't
They call it a "narrow moat," based on "switching costs and intangible assets." Oh, please. Every tech company these days claims to have a moat. It's the new buzzword. Palantir supposedly differentiates itself with its AI framework. But come on, AWS, Snowflake, and ServiceNow aren't exactly slouches in the data analytics game. Are we really supposed to believe Palantir has some magical sauce no one else can replicate?
And this "ontology framework" that allows for the "democratization of machine learning"... give me a break. Sounds like marketing BS to me. They're just throwing around buzzwords hoping investors won't notice they're basically selling snake oil.
Financials: Shiny on the Surface, Maybe Rotten Underneath
Okay, fine, they’ve got a pile of cash—$900 million, plus $5 billion in marketable securities. No debt. Sounds great, right? But here's the thing: that liquidity position improved by $700 million this year. Where's that coming from? Are they actually making money, or are they just shuffling things around to make the balance sheet look pretty?
The biggest "uncertainty," according to Morningstar, is the "broad potential size of the total addressable market." Translation: they have no freaking clue how many people will actually pay for this stuff.
The Bull vs. Bear Cage Match: Who's Gonna Tap Out?
The bulls are all hopped up on the AI Kool-Aid, claiming Palantir is "primed to take advantage of the trend toward digitization and automation." Sure, every company is trying to "digitize" and "automate." It's what companies do. Doesn't mean Palantir is the only game in town.
Then there are the bears. They say Palantir's market is limited to "entities that coalesce with Western ethos." Which, let's be honest, is probably true. Not exactly a global empire in the making, is it? And the decreasing cost of AI inference? That's a real threat. The barriers to entry ain't what they used to be.
Oh, and let's not forget the dual-class share structure. Because nothing says "good governance" like letting the founders do whatever the hell they want without having to answer to pesky shareholders.
Offcourse, I could be wrong. Maybe Palantir is the future. Maybe I'm just a grumpy old cynic who doesn't understand the genius of their AI-powered algorithms. Then again, maybe the whole thing is just a house of cards waiting to collapse. I'm leaning towards the latter.
This Whole Thing Smells Fishy...
Palantir's valuation is insane. The hype is deafening. And the whole thing just feels…off. I wouldn't touch this stock with a ten-foot pole.
