AI Doesn’t Justify Palantir’s Ambitious Valuation

Summary:

  • Palantir’s product is industry-leading, thanks to improvements in AI.
  • The current valuation, however, assumes optimistic results with no hitches.
  • Uncertainty about cash flows exists, given the volatility of the technology.
  • Share dilution is also occurring, which will reduce long-term returns.

Authorities raising his hand refusing to accept bribes from customer.

AmnajKhetsamtip/iStock via Getty Images

I’ve been watching Palantir (NYSE:PLTR) for a few years now. It’s a business I like quite a bit, and it seems the market likes its stock quite a bit as well.


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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