Palantir (PLTR): A Bull Case Theory
We came across a bullish thesis on Palantir on Compounding Your Wealth's Substack by Sergey. As of 9ᵗʰ July, Palantir's share was trading at $139.71. PLTR's trailing and forward P/E were 635.05 and 297.26 respectively according to Yahoo Finance.
Palantir is a software company specializing in big data analytics and integration platforms, founded in 2003 by Peter Thiel, Alex Karp, Joe Lonsdale, Stephen Cohen, and Nathan Gettings. The company's primary products include Palantir Gotham, Foundry, Apollo, and the Artificial Intelligence Platform (AIP). Palantir's mission is to empower organizations to make sense of their data to solve complex problems and drive impactful decisions. The company operates within the technology sector, focusing on software solutions for big data analytics, artificial intelligence (AI), and data integration.
Palantir's competitive advantage lies in its high switching costs and proprietary intellectual property (IP), with over 3,400 global patents. The company's platforms require extensive customization and integration into client workflows, resulting in substantial switching barriers. Palantir's Total Addressable Market (TAM) is estimated at over $200 billion, expanding with a projected CAGR of 18%-25% through 2030. The company's revenue growth has accelerated, reaching 39.3% YoY, with a strong outlook for the next quarter.
Despite the company's strong performance, its valuation remains extremely high, reflecting strong expectations of continued revenue acceleration. Palantir's stock-based compensation (SBC) expenses decreased to 18% of revenue, but shareholder dilution remains high. The company's commercial growth is more important given the larger market opportunity, and it will be crucial to watch how the international commercial segment expands going forward. At the moment, the author remains on the sidelines and does not hold PLTR due to its high valuation and already elevated expectations being priced into the stock.
Previously, we covered a bullish thesis on Palantir by Stefan Waldhauser on June 23, 2025, highlighting the company's potential as a backdoor play on the AI energy boom through its critical energy infrastructure assets. The stock has depreciated by 0.15% since our coverage. The previous thesis emphasized Palantir's role in powering AI with energy infrastructure, positioning it for growth. Sergey shares a contrarian view, emphasizing Palantir's high valuation and already elevated expectations, citing a high stock-based compensation expense and shareholder dilution. The conviction in the thesis has weakened due to valuation concerns.
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