The Future for Palantir (Part 2)
And why time must be an ally
This Q3 earnings report not only reaffirms my conviction in Palantir but it’s also great news for the future, since it shows that during hard times, while other companies from the software sector like Meta, Google and Microsoft either freeze hiring or lay off thousands of people and show disappointing revenues and lower guidance than expected, Palantir meets expectations and raises guidance for some metrics. Even if the stock keeps falling, numbers are met and the list of clients keeps growing.
Also, it’s quite comforting to see clients we uncovered almost 1 year ago getting recognized today. Imagine 1 year from now…
The survival of Palantir, I think, hinges on who wins the ideological war that is going on now. If elected officials put cheap “flower power” demagogic discourse before substance, and therefore they don’t award Palantir with the essential National Security contracts, we fail. A responsible Government is detrimental to Palantir’s survival. If the infantile discourse imposes itself over the stable, results-driven way of doing things, there will be no competition and the winners will end up providing sloppy solutions and will lose the edge, since the best product won’t the adopted standard. This gradually blunts our sharpness and makes the West vulnerable to foreign threats. And we just can’t afford this in these times.
Last week we talked about the Russians and their work in developing a Foundry copycat, and that opens a debate regarding other major (ideologically adversarial) countries. Will China develop its own platform? Will Russia also develop a Gotham-like system? My guess is they already have one, and many other countries also do. And my speculation goes on to think China and Russia have their own independent platforms, but share whatever data when needed, especially if it's sensible against the interests of the United States and its allies. And sure enough Iran, North Korea and some other "Axis of Evil" nation has access to some Chinese/Russian AI capability, no doubt about it.
That'd be survival instinct and I wouldn't blame them. We just need to be better at processing data and making it actionable in the shortest time possible. And here is when Palantir enters the field. Today's Q3 results show the US Government not only maintains their use of Palantir but keeps expanding their reliance on the company and Gotham capabilities adding 8 new USG departments to the list of clients.
Of course, the time will come when no new Government agencies sign a new contract with Palantir, but that's part of the plan, and that would mean the company is well positioned and is providing their software products to enough Government departments to properly defend itself. Add that to the modularity of Foundry and Gotham and their ability to communicate internally and you end up with basically a Government OS; a platform powerful enough to resolve any problem with the less resources and time possible, preventing disruption and preemptively acting to defend the people the governments that use Palantir work for.
It's a long game, and we need to bear in mind time needs to be an ally, not a foe. While Palantir is busy establishing the foundations of the future and doing all the hard work, we only have to wait and, if possible, buy shares and enlarge our ownership of this sleeping giant. Because when the exponential growth we are now seeing in clients translates into an exponential revenue growth, not a single FUD article or negative headline will be able to stop the amount people who will want in.
Loved the article, especially the closing!