Not everyone is likely to be familiar with the US software company Palantir. This is hardly surprising, as the data analysis company is hardly ever seen in everyday life and has only been on the stock market for around four years. However, if you look at the company's performance to date, many investors will be disappointed that they haven't been paying attention to the tech group for a long time. Between 2021 and 2023, turnover increased by more than 44% and earnings turned into the black during this period. Palantir has also recently set the course for artificial intelligence (AI). All of this has resulted in a gain of more than 500% for the tech stock since its direct listing on the NYSE in September 2020.
In recent days, however, the Palantir share has switched into correction mode. It fell by more than 16% from its all-time high of USD 45.14 before the presentation of the third-quarter figures. However, the big data group was once again able to impress with its interim report presented on Monday evening after the close of trading. Palantir already reported above expectations for the first half of the year. The company increased turnover by 27% in the second quarter, while operating profit climbed disproportionately by a good 30%. As a result, the data analysis company raised its target for annual sales from USD 2.68 billion to USD 2.69 billion to USD 2.74 billion to USD 2.75 billion.
But that was not high enough. At the Q3 presentation, the company raised its annual sales forecast for the third time. Management now expects revenue in a range of USD 2,805 to 2,809 billion for 2024. The target range for the adjusted operating result was also raised to USD 1.05 to 1.06 billion (previously USD 966 to 974 million). "Revenue growth driven by demand for AI is having an impact on the bottom line," explained CFO David Glazer in an interview.
Palantir's confidence is based on strong quarterly results. The group, which provides software for governments to visualize army positions, among other things, increased its turnover by 30% to USD 726 million between July and September; analysts had only expected an average figure of USD 701 million. Growth was driven in particular by orders from the US government. Their revenue increased by 40%, which corresponds to around 44% of total sales. However, commercial business with companies also increased significantly. According to experts, this segment could overtake government business as early as next year.
This would come as no surprise, as demand from companies looking to introduce generative AI technology is steadily increasing. "The AI revolution is being driven by the US and has fully unfolded," explains Alexander Karp, co-founder and CEO of Palantir, and continues: "The world will be divided into AI haves and AI have-nots. At Palantir, we plan to support the winners."
As mentioned at the beginning, the company has long been a winner on the capital market. Palantir has already doubled in value this year. The good performance, which also applies to the operating business, even led to an accolade from the stock exchange operator in the fall. At the end of September, Palantir was included in the renowned S&P 500. For a company to be included in the index, it must not only have a corresponding market capitalization, but must also have been profitable in the last quarter and have made a cumulative profit in the last four quarters. A bar that was not too high for the Denver-based company: Palantir has been consistently in the black since the fourth quarter of 2022.
The share price rally also meant that the Palantir share now has a very generous valuation. The 2025 P/E ratio is 94, while the expected earnings for 2026 reduce the value to just 81. This contrasts with annual earnings growth of around one fifth. It therefore comes as no surprise that the majority of analysts currently have no more than a hold recommendation for the share. According to CNN Business, 43% of a total of 23 studies result in a hold rating, 26% see a buy opportunity and 30% vote sell.
Even if there doesn't seem to be much room for upside in terms of valuation, the promising combination of the two megatrends big data and AI could speak in favor of Palantir in the long term. In the short term, however, the price potential appears to be exhausted, which in turn makes a partial protection investment interesting in the meantime. Leonteq has two new soft-callable barrier reverse convertibles on offer for this scenario. These promise double-digit percentage returns even in the event of price stagnation or moderate setbacks. The two products, which are offered in CHF and USD, each have a risk buffer of 41%. If the barrier remains untouched during the maximum term of one year, the product will yield the maximum return. The coupons amount to an above-average 12.20% p.a. for the CHF product and even 16.60% p.a. for the USD variant. The issuer has the right to terminate the BRCs prematurely after six months at the earliest.