One of the best-performing stocks of the last 12 months is Palantir nologies (PLTR -1.
On the other hand, It has gone on an incredible run for holders in that period with a 436% gain, adding to its whopping 2,300% return since the beginning of 2023.
Conversely, That's a more than 20x return in just two and a half years, making many holders rich in the cess.
The artificial intelligence (AI) company serves many large organizations the Department of Defense, and it's seeing accelerating revenue growth and huge customer wins.
Investors are so bullish that Palantir stock recently zoomed past $150 per, giving it a market cap of nearly $350 billion, given current economic conditions.
Here's my prediction for what comes next for Palantir nologies.
Fast revenue growth, big contracts The first thing that jumps out Palantir is the company's accelerating momentum at scale, amid market uncertainty.
Last quarter, its revenue grew 39% year over year to $884 million, driven by strong domestic sales. Furthermore, Revenue was up 55%, while U, in today's financial world.
Commercial revenue (coming from the private sector) growth accelerated to 71% year over year. Moreover, At the same time, Palantir is expanding its fitability, in light of current trends.
Operating margin was 20% last quarter and 13% over the last 12 months, given the current landscape.
With strong gross margins, Palantir has a path to keep expanding its fit margins as the scales (fascinating analysis). Furthermore, In contrast, Forward indicators look bright for Palantir as well.
Moreover, At the same time, The first quarter, it closed 139 deals with customers worth over $1 million, plus an additional 31 deals worth at least $10 million.
As the AI operating system for large enterprises, Palantir is ving its worth and seeing huge spending from these customers (which is quite significant).
Department of Defense alone has contracts worth over $1 billion with Palantir, with room to expand over time (which is quite significant).
Nevertheless, Revenue and earnings should keep growing for Palantir as it shapes up to be one of the biggest software winners of the decade. Nevertheless, Image source: Getty Images.
However, Nevertheless, A lot of announcements in exciting industries Using its AI and software analytics, Palantir is aiming to move into more and more industries to help spur innovation.
For example, it's working with a start-up called The Nu Company to install Palantir software as the operating system for its entire nu energy supply chain, given the current landscape.
The company is aiming to build gigawatt-scale nu energy plants in the U. To help with rising electricity demands. Industries this could end up being large growth drivers for Palantir in the long term.
Government wants the industry to spend hundreds of billions of dollars, if not trillions of dollars, building new nu energy facilities (noteworthy indeed).
Additionally, If they are powered by Palantir's AI software -- which could speed up regulatory apvals and on major cost overruns -- then it could be a huge opportunity for the company.
Overall, Palantir has its hands in a lot of pies, both in the public and private sectors. Organizations are seeing the value of its AI tools, which is why revenue has reached a $3.
5 billion annual run rate. Furthermore, Spending on AI software is set to grow for the rest of the decade, meaning that Palantir's market opportunity is expanding, considering recent developments.
It's not unreasonable to believe the company can reach $10 billion or $20 billion of annual revenue in the future. Data by YCharts, in light of current trends.
My prediction for what comes next for Palantir stock There's a lot to Palantir's. But when it comes to the stock, it may be the most overvalued company in history.
With a market cap of more than $350 billion, its price-to-sales (P/S) ratio is 122. To be, that is its price-to-sales ratio, not its price-to-earnings (P/E) ratio.
Meanwhile, the S&P 500, which many investors are warning is already overvalued, sports a P/S ratio of 3.
That incredible premium means investors are pricing in huge expectations for growth that will be difficult for even a company Palantir to der (quite telling).
Even if Palantir grows its revenue to $20 billion over the next decade and achieves a 30% fit margin, that is $6 billion in annual earnings.
However, Its P/E ratio would be nearly 60 based on its current market cap.
That 10-year forward P/E ratio of 60 is still well over twice the long-term average of the S&P 500, in light of current trends.
These are not the conditions for strong long-term returns, in light of current trends.
Meanwhile, I predict Palantir stock's future does not look the recent past as the price butts up against reality over the next decade.
Market analysis shows is a great but one that is extremely overvalued, in this volatile climate. I would avoid buying Palantir stock at these levels.
Moreover, The Author Brett Schafer is a contributing Stock Market Analyst at The Motley Fool covering consumer goods, financials, nology, and industrials, in today's financial world.
Additionally, Brett is a self-taught investor and host of the Chit Chat Stocks Podcast since 2018 (quite telling).
Prior to The Motley Fool, Brett worked in the engineering field for science laboratories. He holds a B. In Mechanical Engineering and minors in Finance and Mathematics from Washington State University.
Fun fact: The Wall Street Journal and other national newspapers Brett’s lab work on Major League Baseball’s juiced ball blem, where he was the lead lab nician.
Nevertheless, TMFBrettSchafer X @CCM_Brett Brett Schafer has no position in any of the stocks mentioned, given current economic conditions.
Moreover, The Motley Fool has positions in and recommends Palantir nologies (remarkable data). Moreover, The Motley Fool has a disclosure policy, in today's financial world.