Palantir Technologies (Nasdaq: PLTt) is not your average company. When he joined S&P 500 Last year, Alex Karp said: “They do not understand how we could change the change and he left … from what … professional managers and some analysts thought that they were a monster of Frankenstein powered by the leader of the strange program – I – for a dynamic, clearly profitable company worthy of a worthy company and admitted to S&P 500. “

Returns from the share price are also not normal – by about 1,800% in less than five years! This means that everyone who put 5000 pounds on IPO in 2020 would now have over 90,000 pounds.

Actions really began in mid -2012, when investors realized that Palantir has a huge benefit of helping organizations in the operate of artificial intelligence.

In the last quarter (Q2), the company’s revenues increased by 48% to over USD 1 billion. Looking to the future, management is aimed at a ten -fold enhance in revenues compared to last year’s USD 2.9 billion. Impressive things.

So why do I avoid stocks? Here are two reasons.

Mainly the American Revolution

In the quarter, revenues from the USA increased by 68% year -on -year and 17% quarter to the quarter. This included a 53% enhance in the US government’s revenues and a stunning enhance of 93% of commercial revenues in the USA. Customers gather on the artificial intelligence platform.

However, how many times it reminds us of the carp and these numbers show, this is the AI ​​revolution led by the USA. The enhance in international revenues is much less explosive. Indeed, the open general director often regrets what he considers to be the lack of Europe’s ambition on this front.

In his letter to shareholders in the fourth quarter of 2024, he wrote: “When America is once again preparing ahead, our allies and partners in Europe lag behind … while the tenacious innovation of American companies disrupts and transforms global industries. Europe must adapt to AI’s possibilities and challenges or risk ruin. “

Of course, European defense expenditure is to enhance, so there should be many contractual possibilities for Palantir. And only yesterday (September 18) it was announced that the software company would invest up to £ 1.5 billion to make Great Britain the leader of innovation in defense.

Defense Secretary John Healey said: “By using the power of artificial intelligence, we will increase the effectiveness of our armed forces. “London will become the basis of the European defense activity of Palantir.

Nevertheless, it will probably remain dependent on the American commercial sector due to the powerful enhance in revenues. If the American economy immersed in the recession, enterprises could limit their AI investments, slowing down the rapid development of Palantir.

Quotation

The second (main) reason I do not intend to buy stocks is that I think it is now very overstated.

It is trade at 130 sales times and 204 times ahead. In other words, investors pay USD 130 for every $ 1 revenue and a very steep bonus for the expected earnings.

Palantir believes that he will become “The dominant company of the future software“The problem is that the market already values ​​it, leaving little space for a mistake, if this does not happen.

Translating shares can be very risky, no matter how world class is. Palantir is a company that I would be interested, but not at today’s price of 177 USD per share.

Saying that I think there are other growth actions that are a better value for my wallet today.