Palantir (PLTR) is on Fire! AI Strategy Fuels Massive Growth, Stock Soars 18% Post-Earnings!

You could have lived the dream life—retiring early, indulging in eating, sleeping, hitting the gym, enjoying buffets, and shopping—all thanks to investing in the undiscovered gem, Palantir Technologies, at the beginning of last year. I missed the rally... [Facepalm] 

$Palantir Technologies Inc.(PLTR)$  is absolutely killing it! Their AI strategy has propelled their performance to new heights, with their stock skyrocketing by 18% pre market. 

Letter to Shareholders

February 3, 2025

We are still in the earliest stages, the beginning of the first act, of a revolution that will play out over years and decades.

Palantir delivered a mind-blowing Q4 2024 earnings report, smashing market expectations and sending their stock price soaring by 24%. Their Q4 revenue hit a stunning $828 million, a 36% jump year-over-year, with earnings per share reaching $0.14, a whopping 75% increase! Notably, their U.S. commercial sector revenue surged by 64% to $214 million, while government sector revenue grew by 45% to $343 million.

Their customer base is expanding like crazy, now boasting 711 clients, a 43% increase from last year. In terms of deal size, they closed 129 major transactions this quarter, all over $1 million. The bigger deals were especially impressive, with 58 transactions exceeding $5 million and 32 breaking the $10 million mark!

Their performance on the Rule of 40, a key metric for SaaS companies, is just phenomenal, improving from 42% in Q1 2023 to an astonishing 81% in Q4 2024, with an annual average of 68%, far surpassing industry standards.

Moreover, their Q4 operating cash flow was $460 million (56% margin), and adjusted free cash flow reached $517 million (63% margin), with $5.2 billion in cash on hand, showcasing their financial strength for future growth.

CEO Alex Karp emphasized Palantir's pivotal role in the AI revolution, with this growth fueled by their deep dive into artificial intelligence. They're not just preparing for the future; they're making AI work for their clients right now, positioning themselves perfectly in the current AI wave.

Their strategy isn't about creating new models but about helping businesses apply these models effectively. This approach has proven spot on because what most companies really need is how to integrate AI into their operations, not to build their own AI models.

On the partnership front, Palantir renewed their Vantage project contract with the U.S. Army, which could extend up to four years, showcasing their strong collaboration.

A highlight was their partnership with the Cleveland Clinic, where Palantir's solutions led to significant improvements in key operational metrics, demonstrating the real-world value of their tech in healthcare.

Looking forward to 2025, Palantir is super confident, expecting U.S. commercial sales to grow by at least 54% to about $1.08 billion. They've set their sights on total revenue between $3.74-3.76 billion, well above analyst expectations, reflecting their optimism about future growth. 

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