Palantir Technologies Inc. (NASDAQ: PLTR) continues to work with the government as an important part of its business.
The US Special Operations Command has extended its contract with the company that specializes in big data analytics.
Could the “government” portion of Palantir now be in danger, given that Donald Trump has asked Elon Musk and Vivek RAMASWAHY to cut the US federal budget from $2.0 trillion to $1.5 trillion?
Alex Karp, the chief executive officer of Palantir Technologies Inc., says that it’s not true.
Why does Karp have confidence in El Musk
Alex Karp has named Elon Musk as the best candidate to lead the Department of Government Efficiency, a new initiative.
He does not believe that the billionaire entrepreneurs will hurt Palantir, as the company provides the government with software that is highly efficient and productized.
In a recent Fox Business interview, CEO Karp stated that he had “enormous faith” in both of his employees to figure out what works.
He believes that efficiency and transparency in government operations will produce better results for less money – which is in line with the Department of Government Efficiency’s broader agenda.
Palantir’s US Government revenue increased by 40% year-over-year to $320 million during the company’s most recent reported quarter.
Palantir easily beats the “Rule of 40”
Alex Karp, CEO of Palantir Technologies, took a positive approach when he spoke with Fox Business about the future of Palantir Technologies.
He is bullish, as “technology is the primary basis of the US economic right now”. PLTR, however, is in a good position to capitalize on AI. Statista estimates that the market will reach $1.0 trillion within the next ten year.
According to the “Rule of 40”, a well-performing software-as-a-service (SaaS) company should have a combined year-over-year revenue growth rate and profit margin of at least 40%.
Palantir is, by comparison, at a global record high of 68 as I write this, said the chief executive. PLTR has not yet announced a dividend.
Analysts still recommend pulling out of Palantir stocks
Louie DiPalma, William Blair analyst, remains bearish about Palantir despite rapid growth and management’s confidence due to valuation concerns.
He believes that PLTR is fairly valued at $40, as its fundamentals are similar to Snowflake. Palantir Technologies, however, is worth more than $100 billion at the time of writing.
DiPalma believes the Nasdaq listed firm will fall more than $700 millions short of its revenue forecast for 2025.
He doesn’t see the recent team-up between the company and Booz Allen, to ramp up the US national defense, as a significant catalyst.
William Blair advises investors to take advantage of the Palantir shares, which have more than quadrupled in value since the beginning of this year.
This post Palantir’s CEO says he has “enormous confidence” in Elon Musk could be modified as new information becomes available
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