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What's up everyone? It's Karthik with Money Wise. Let's talk about Palantir stock. It's been a while since we have discussed about this company. So, I definitely wanted to go over and uh break down some very important analysis because I did do a video 1 year ago. In fact, actually in 2024, almost 2 years ago, uh going over the possibility and what it's going to take for Palantir to actually go up 12 times, meaning getting up to over $1 trillion in market cap, right?
So, of course, pretty crazy stuff. A lot of views, 10,000 views back then, 2 years ago again, September 2024 is when I posted that video. And Palantir right now is sitting at a market cap of just over $327 billion. I'll also break down exactly where, you know, the stock was back when we were talking about uh this this company, of course, 2 years ago.
We've been talking about Palantir for over 5 years ago, but then 2 years ago, of course, we did have um uh the the stock trading at around $44, $45, right? So, if you come back to September 2024, we were looking at a price point which was right around here. So, August, September, right there. So, September 2024 is $29, right?
So, since then, uh the stock has of course gone up over 350, in fact, almost 600%. We have pulled back a little bit more recently as uh Palantir is going from all-time highs of over $208. It is down over 34, 35% trading down to just over $136. And uh right now we're seeing a little bit of this overall downtrending channel, in other words, lower highs and lower lows.
And we'll talk a little bit about the technicals later in the video, um as well. So, let's talk about the fundamentals first. And before we get there, my full 41 stock uh June 2026 shopping list is now available on the Money Vest platform. Uh so I posted a video. This is almost a 30-minute video that you can watch um as well as my previous shopping list performance update.
So this is actually a free video that you can watch. You can pretty much uh join our Patreon for free and watch this video. You can see the performance and the triggers and the signals that we had. Uh and then you can of course you can join if you want to and get access to the brand new shopping list that's available on our Money Vest platform.
We're going to add a notification feature where you're going to get notified if the price targets are getting hit. Um and then of course there's super educational video as well going over the purpose and the usage of the shopping list and how to actually maximize this benefit. So that is now available.
The ETF shopping list is going to get updated as well very soon. So we'll uh we'll we'll update everybody uh on when that is ready to go. It's most likely going to be next week. Now Palantir is not having the best year. It is down about 24 25% in the last 6 months. It's down over 18% in the last year.
So year-to-date here we're seeing Palantir kind of underperform uh the entire market and of course the tech sector. Software stocks have been struggling as well. Palantir is one of the biggest enterprise AI software companies out there working directly with the government, the Department of uh Defense.
Uh and of course a lot of governments all over the world. So we've got a commercial and a government sector that has been growing rapidly. So if you really look at the numbers here, we're looking at first quarter 2026 numbers representing a growth of 85%. Revenues jumping to 1.63 billion dollars. And US revenue growing at 104% uh to 1.28 billion.
And US commercial revenue is up 133% to almost 600 million dollars. And US government revenue is up 84% year-over-year to 687 million dollars. And management also raised the full year guidance of 2026 to 7.65 and 7.66 billion dollars. Palantir can continues to differentiate itself in the enterprise AI market by positioning the AIP platform as a layer that makes AI usable inside real organizations.
And if you come over to where the valuation is right now, so if you come over to the Money Vest platform, and again, we simply type in Palantir here, we go over to the stock page, fundamental analysis under analyst estimates, we are looking at a valuation right now, which is sitting at over 93 times forward earnings, right?
131% growth expected in 2026. So, average earnings, $1.46, a high earnings expectation of $1.66, and a low of about $1.36. And we're looking at a 133% growth rate with a P multiple of 93.64. And as the company grows significantly, we're talking over 80% growth rate over the next 5 years, the P multiple, of course, comes down dramatically here.
When you look at the revenues, and revenues are also in a very similar boat. You'll notice the growth rate is intense. We're looking at over 72% growth rate for the next 5 years in terms of the revenue growth here. Price-to-sales multiple drops significantly. We're talking 90% drop here from 40 times sales, where it is right now, 2026 basis, down to just over 4 and 1/2 by 2031.
And the revenue number is insane. By 2030, it has now reached almost 70 billion dollars. If Palantir is going to actually grow revenues by almost 1,000% or 10x from 7.7 billion this year, which is what they've been guiding for, to over 68 billion dollars by 2030. And you want to know where this number was 2 years ago?
In September 2024, when I did this video, this number that we just went over, 2030, going to write it out. 2030, this number expectations, I'm talking analyst expectations for 2030 2 years ago, 30 billion. That's it. That was what analysts back then were expecting from Palantir, that they're going to hit $30 in annual recurring revenue by 2030.
That number has now more than doubled. And it's expected to reach over 30 billion um well, half of that by 2028. And then 2029 is when they're expecting the numbers to explode even further from 16 to 41 billion dollars. Now, I would still take this with a little bit of a grain of salt, right? Because if you come over to the side, there's 22 analysts, and then this number drops down to just 11.
So, only half the analysts are actually projecting out to 2029 right now. Um so, that's why, you know, obviously we don't have as much data as we do for the next year. And for the next year, we basically have the management's own guidance. But even for next year, 2027 though, uh 23 analysts, and the revenue forecast is 11.2 billion.
That's a growth rate of 45% again, very strong growth rate. 42% growth in earnings. That's a jump from about a $1.46 to a $1.00 or $2.08. Again, the analysts are quite a bit. So, if I bring over 19 and 19 analysts, and then it drops down to nine and three and three. So, the farther you go out in timeline, the lower the visibility, hence fewer the analysts, hence more skepticism around the revenue and the earnings figure.
Uh but more short to medium term, it's a lot easier to kind of project and understand, okay, what does that growth rate, what does that revenue and earnings look like? So, but bottom line is that Palantir is on this hypergrowth, right? It's on this massive, massive growth potential right now um as as AI continues to to move in strides.
And you'll notice the year-over-year revenue growth has been very, very strong consistently across the board at over 70%, 60%, 85%. And the most important number is also the net revenue retention. I think this is also something that a lot of people do miss. Uh this is something that I found on X, which was quite interesting.
Simply put, Palantir delivers demand and cost benefits that leave the customers yearning to do more with them. That's why the net revenue retention is at 150% as of first quarter 2026. That's why the video game-like numbers you see below exist. Commercial revenue is growing, EBITDA margins are growing, but the net revenue retention simply means that their existing members are spending more money with Palantir for all future upgrades, for whatever they are launching, for upsells.
So, whatever the whatever the original revenue was from one customer has now grown to 150% on average because they're spending more money with Palantir. So, that is retention metric, right? It's actually keeping customers within the Palantir ecosystem, a very very strong metric for stickiness and for how good the moat for the company is because the switching cost is high and there might not be even be as good alternatives as what Palantir offers.
So, you've got yourself a company that is growing revenue rapidly, earnings are expanding, margins are getting better, net revenue retention is strong. So, this is again a $300 billion business that easily, in my opinion, still has the potential to get up to $1 trillion long-term. How long-term are we talking?
Well, 2 years ago when the expectations were to get up to $30 billion of revenue by 2030, we were looking at a timeline which is of course 10 to 15 years because the revenues would have had to grow by over 28 to 18% consistently every year in order to get to that level. 42%, which is what where we are now.
So, if you come down to revenue numbers, we are looking at actually 72% for revenue, which is quite high. So, we're actually even higher than this. So, the timeline 5 years, right? From 2 years ago and 2 years have already passed. So, in the next 3 years is Palantir going to triple in value? I think that seems a lot more realistic if they're able to continue to grow their numbers by over um by over 70%.
If revenue keeps growing by 70% and it's a simple math at that point like because we're getting up to 68 almost 70 billion dollars. Right? 70 billion dollars, even if you apply a 15 times sales, which is much lower and more stable for a software company, Palantir is at a trillion-dollar business. It's It's at a trillion-dollar business, right?
It's just simple math. There's There's Honestly, there's no predictions. There is no speculation. There is no stories. We don't even need to talk or dig too much into all of this. If Palantir gets to over 60 billion dollars of revenue by 2030, you apply a simple 15 times sales, and we're over a 900, almost a trillion-dollar business.
Simple. Simply put, it's just math. Because the multiples are coming down, in fact, right? From 40, 28, 19. If it stabilizes at 15, which is where software companies tend to usually trade, we're looking at a trillion-dollar business. So, the big question, of course, remains the the jump that we're going to see in 2029 and 2030.
Because that's 16 billion dollars to 41 billion. I would take that with a grain of salt, obviously. And then, 68 billion, again, it's not double. It's like a 50, 60% 50% growth. Very much doable. But this right here, this jump, is what I'm really curious about. That's like over 150% growth here from 16 billion to 41 billion dollars for 2029.
But nonetheless, it is still very much on track to doing some very good numbers this year. And valuation still makes or starts to make a lot of sense. So, the five-year outlook, as per an article on Motley Fool, Palantir trades at 62 times sales, forward sales. It actually is lower than that. We're looking at 43.
Valuation difficulty justified unless the company remains one of the biggest winners in the enterprise AI market. A balanced five-year scenario assumes revenue compounds at about 30% annually. So again, they're going with the lower number, realistically. From 2026 projected revenue base, that would put revenues nearly put revenues at 28 billion dollars by 2031, not at the 68 billion crazy number.
This is not an aggressive estimate considering the analysts expect 2031 revenues to be close to 38.8 billion dollars. So, some analysts 38.8 billion, but combined we're looking at just over $60 and if Palantir commands a premium of 25 times by fiscal 2031, the market cap will reach 700 billion even with conservative revenue expectations.
Again, these are conservative numbers. If you go with the average or a bit more aggressive, we are looking at 900 billion to a trillion dollars. And they're also going with a much higher sales multiple. If you go with slightly lower with a more aggressive growth rate, then we're looking at 1 trillion.
If you go with 25 times sales and a much higher growth rate, I mean the numbers just explode. I think 1.5, 1.6 trillion is where we might end up. And that would put a price target of $272 on Palantir from a 5-year perspective. So, and then there's also people taking bets against Palantir because this is Michael Bury's take.
Brutal take on Palantir sandcastle supported only by AI applications narrative. And he's expecting, you know, for the stock to actually break down from this head and shoulders pattern reflecting the waxing and waning of extremely bullish psychology around Palantir. Now, look, I I would agree to some extent the Palantir's valuation, yes, is questionable.
It's a little bit higher, but the growth does justify it for as long as it does, right? Because the growth is not like Palantir is trading at a multiple where the growth is not there. They're absolutely smashing quarter after quarter, breaking records, hitting highs, and the numbers are there to back up the valuation.
So, what is happening in my opinion with the technicals, though, is Palantir stock is taking a little bit of a breather. We're seeing it go sideways. We're seeing it as absolutely trade in this lower high and lower low pattern as the fundamentals take time to catch up with the price action here. It's down 30, 35%.
Again, not a big deal for a Palantir stock that is extremely volatile and high beta. It's like a drop in the bucket of being down 30%. I do think it's got a very strong support at 127. So, this right here is going to be a pretty strong base. Anything under $100 per share starts to make a little bit more per for Palantir because, you know, we're looking at $97 in in in stock price with an earnings for this year at $1.46.
I mean, then you're looking at a stock which at $96 divided by $1.46, we're looking at 65 times earnings where the earnings are expected to once again more than double this year. 81% um next year, so $96.97 divided by $2.08 Now you're looking at a 46 times earnings multiple for the stock that's expected to grow twice as fast, 81%.
So that's a PEG ratio of 0.5, right? Price earnings divided by the growth rate. It's a 0.5 PEG ratio, which in in fundamental terms makes the stock look undervalued, growth adjusted, right? Absolute terms, yes, you can argue high multiples, but growth adjusted multiples, which is the PEG ratio, I mean, that is where Palantir starts to look very attractive from a long-term perspective.
So, um so where do I stand with Palantir? Long-term hold, buy and DCA if the price drops further. For me, I think Palantir, if it continues to execute as good as it is right now, retention remains strong, execution remains strong, adaptability to new AI trends remains very very good. In my view, we're looking at Palantir as one of the greatest success stories in modern American history going from a company that was worth nothing, quite literally 3 years ago, 4 years ago, to becoming one of the fastest $1 trillion businesses um in the world.
And that is for a public company. There's a huge difference for private valuations exploding versus for a public company to go from nothing to $1 trillion. And I think Palantir has the potential to do that. So, hope you all enjoyed this video and found it helpful. Again, link's going to be down below for the shopping list if you want to join, of course, be a part of our Money Vest community.
Levels I'm watching, 127 as a support, 97 as a much stronger area of demand, and of course, $65 would be, in my opinion, kind of like a no-brainer buying opportunity because the valuation multiples will come down relative to its growth rate long term. The big question is the growth rate itself, and if they continue to come in quarter after quarter with some very strong numbers, then it just becomes a math problem at the end of the day.
Like, if revenues explode, you would just attach a multiple, and that's your price target for the market cap where it should be realistically be trading in the future, and that's the upside potential for this stock. So, hopefully you all enjoyed it. Make sure you drop a like, subscribe to the channel.
Any questions, let me know. Email me at [email protected], and I'm more than happy to help. And as always, happy investing. I'll see you all in the next video.
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