Can Palantir Maintain Its Impressive 170% Growth Streak Into 2024?

Palantir has witnessed a spectacular rise this year, surging 170% after a period of struggle where its stock value dipped close to record lows. This impressive comeback has sparked discussions about the company's sustainability of growth moving into 2024. Despite the notable upswing, the longevity of this trend is a matter investors are keenly looking at.

Palantir's Stock Journey

Palantir's journey through the stock market has been a rollercoaster. After going public in September 2020 amidst a thriving bull market, the company, similar to other tech stocks, experienced a steep decline, seeing an 87% drop in value from early highs. The current stock valuation remains 60% lower compared to its peak performance in 2021. Despite this, the company's financial records show respectable gains, with a 16% increase in revenue to $1.6 billion in the first three quarters of 2023, compared to the previous year.

However, these figures fall short of the ambitious 30% growth rate predicted by CEO Alex Karp for the 2022-2024 period. Additionally, Palantir's newfound profitability and a forward price-to-earnings ratio of 71, along with a price-to-sales ratio of 19, might make investors cautious.

Potential for Future Growth

Despite these concerns, Palantir's stronghold in big data and artificial intelligence (AI) offers a glimpse into potential growth. Its government-oriented software, Gotham, along with its commercial counterpart, Foundry, are proving to be valuable assets. Notably, Foundry is delivering a 315% return on investment for its users, as per Forrester's estimates. Palantir's Artificial Intelligence Platform (AIP), which enhances both Gotham and Foundry, has shown promising productivity gains through AIP Bootcamps, as reported in a recent earnings call.

These productivity improvements and potential to outpace the projected growth rate make Palantir's future in the stock market challenging to predict but potentially lucrative for investors. Coupled with the company's transition into profitability, there is a chance for the stock's value to soar once again.

Investing in Palantir for 2024

Given Palantir's innovative drive in AI and the substantial productivity increases from AIP Bootcamp, betting on the company's growth in 2024 may seem appealing to investors. While it is hard to quantify the exact impact of these advancements on revenue growth, the previous high valuation metrics might not accurately reflect Palantir's prospects for 2024. This uncertainty leaves open the possibility for the stock to revisit, or even exceed, its past highs, offering a potentially bright future for its investors.

Palantir, growth, stock