Hey, this is Tom Nash and let's talk about the future of Palantir and I'm gonna guarantee something here. A lot of you are not gonna like to hear what I have to say about this company. Now look when then eyes. The famous Wall Street Analyst went on TV and he called Palantir the Messi of AI Everybody got excited overnight and if you were one of those people who bought a lot of volunteer shares on the frenzy out of Fomo on the eve of their knives Palantir slash Messi craziness then you deserve to get hammered because everybody who chased this stock and followed into it on that twenty dollar prize and went balls deep into the stock without understanding what they're doing.

They got destroyed by professional Traders and you know what? They deserve that same fate every single time. Chasing following fear of missing out into stocks about understanding what you're doing is a bad idea. Buyers of 20 dollars per share Palantir shares went absolutely horribly destroyed by professionals by Traders By people who knew what they're doing in just a matter of two days. Don't ever Chase Stocks don't ever follow into stuff without understanding what you're doing.

Now what happened with Palantir? Why did it drop 20 in a matter of two days? Well, first of all, earnings were not bad. Earnings were actually in line with expectations. but you know this stock still dipped quite heavy as you can see here on the screen. So what happened? Well, number one.

we had a lot of macro issues which I covered before in the previous video. Moody's the credit rating agency came out and said, well, we're looking forward to a recession in 2024 and that had to be priced in, but that wasn't the sole factor that drove the share price down. Obviously there was a little bit of disappointment from the earnings. Now Palantir had solid second quarter earnings, no doubt.

Very exciting stuff about the AAP platform. Very interesting future facing potential mind-blowing stuff. We heard from Alex team, but there was never anything. absolutely mind-blowing from a fundamental perspective on the numbers.

similarly to what we had with Nvidia The management then came out and said, hey, we're expecting 100 growth next year Nothing cataclysmic like this happened that drove the share price up and that obviously was not also expected. But when it happens, you see the Nvidia level Spike What we got was a decent quarter. a very good quarter On the number side, 13 up in revenues, 50 up in Billings guidance for 2.2 trillion sorry 2.2 billion dollars this year revenues I Wish it was 2.2 trillion. You know it's a 16 annual growth actually faster than currently, which means acceleration in the future quarters.

A very good balance sheet still stays intact with three billion dollars in cash, no debt. So where is the problem? Where's the disappointment? Well, it's more on the narrative side. Well, number one: we had the share buyback announcement. Palantir comes out and said, hey, we're gonna buy back a billion dollar worth of shares and that's very exciting because Palette is actually talking the language of the institutional shareholders, which there's so much interested in attracting to the stock.

Instead, they got a lot of retail. Traders Opportunists speculators. They want the steady, solid institutional investors in the game, so a share buyback is actually a good way of doing this. The company buys back its own shares, pays shareholders money, and that also is a signal that the company thinks that the intrinsic value of shares is very low.

Now obviously the criticism for volunteer here came from the point of look, you guys could have done this at seven dollars per share, You will be doing this now. At 15 16 per share, it makes no sense and people get upset about it. But the fact of the matter is, you have to understand that BuyBacks are a psychological move. You want to transmit and project strength if you're doing.

BuyBacks When you share drop from 35 to 7, you're basically transmitting and communicating fear and panic. You're trying to artificially inflate the share price when you're doing this coming off of a 180 swing year. to date, that's coming from a place of strength, that's the right way to do it. Theoretically, if you could have done it at seven dollars and actually still project strength and not weakness, Sure, but there was no way to do it.

So I have no issues with what I done here. Now the company also mentioned multiple times the S P 500 probable inclusion at the end of the year when they actually hit four you know, consecutive quarters of Gap of stability. Palantir meets all the conditions for the inclusion, except that four quarters of consecutive profitability on the generally accepted accounting principles. Now, obviously they've mentioned this multiple times and a lot of criticism from investors that said, look, why are you hyping this up and I never understood that criticism because this is a huge deal.

Look at what this inclusion did for Tesla it's a major major event. It proves that this is a huge deal and they were right to talk about it again. I Also never understood the part where these guys were complaining last year, that time of year was not speaking the language of Wall Street and was not speaking the language of institutional investors. And now that they're doing this and they're talking about the inclusion, they get criticized for it.

It's actually very funny to me now. There was also lots of criticism for the growth of the company and the net or retention. So the business, if you segmented, grew 15 on the government side, 10 on the commercial side combined 13 and there was 110 net dollar retention which is a decline. Now if you look at snowflake, they're operating at 180 net door retention.

Absolutely insanely better than Palantir. Now what you have to understand is comparing the snowflake retention to planetary Intention is not a good comparison because Snowflake is selling kind of a low tier item. More in the consumption side, Palantir is selling a high ticket item. It's a very different business, but also the strategy.

here. It plays a huge role. Pollen Theater has completely shifted its strategy of the past two years. Basically going from a place of trying to grab as much as they can into this Trojan Horse kind of pricing model.

You get in, you're under price underperformed, you lost leader, your way into a business. but then when your product becomes sticky enough, you raise the prices and actually generate cash flow, revenues and profits. I Mean that's currently misunderstood by the markets, but it will be understood when they see the reveal when that aha moment happens in three, four, five years. whenever Palantir does that pivot.

But again, Wall Street Media and CNBC and all the Talking Heads they're not going to get it until they see it clearly in the financials, which will take three to five years and by that time probably is going to be trading at a lot higher multiples. And that's why they will miss the boat on this. And that's okay, they always do. But look, if you want a hint at how quickly Palantir is growing behind the scenes, look at the customer account.

Customer count went up by 30 eight percent year over year this quarter. That's not something you see every day. customer accounts going by almost 40 percent. Now another issue that we have to talk about that kind of puts a damper on the palantir numbers is the stock based compensation, the options, the Rsus that they're giving out to employees.

Now look, this is another case where retail investors have done a much better job than institutional investors at analyzing what's actually going on. here. You see if you look at Stockbridge compensation for palantir as a percentage of Revenue What you learn is something very interesting. You learned that the stockist compensation palantir in Q4 of 2020 three years ago was 75.

so 75 percent of revenues went to stock base comp. Currently this quarter where 21.4 according to Emir M My friend from Twitter I want you guys to go and follow him. He does one of the best charts of palantir. in fact I once saw his chart and I thought it was an official Palantir chart.

It was that good. So he shows this beautiful chart how Starbucks Comp is coming down every single quarter for the past two years. every single quarter it's coming down, it's currently at 21.4 percent. Now, the thing is that 21.4 is literally on par with the rest of the industry, so there's no complaint currently to the stock based on compensation of a sorry component of palantir.

So that's all news. That's kind of a rehashed, regurgitated argument. Now, it doesn't really make a lot of sense that 21 of Revenue is absolutely normal. Look at snowflake, look at others.

Now, there's another complaint here about client concentration. Look, the top 20 clients of Palantir Drive have their business about a billion dollars. The other 400 clients are responsible for the other billion. So it's a valid point when all of your business is concentrated in the hands of a few clients.

That's risky I Get it. It's a valid point. But you have to understand that the percentage of overall Revenue actually went down. So the top 20 clients gave you about 470 million dollars in 2020.

they currently give you a billion, but they're currently 51 of revenues back. In 2020, they were 61 percent. So you see this thing where the revenue for the top 10 clients keeps climbing from 470 million to 1 billion within three years. But the percentage of Revenue is actually going down from 61 to 51.

Again, this beautiful chart is from Mrm. Go follow him on. Twitter. So stock based comp is one thing that's regurgitated.

Clan Concentration is a valid point. But look, they are getting better at this. And also not every company can drive one billion dollars from 20 clients. It's proof that their largest clients are spending more and more every year.

In three years, they went from 500 to a billion, so they've doubled this spend for the top clients. That means that the products and the services are sticky. They're spending more every every year. It's not a huge issue, if the trend line is going up, it's a major growth Catalyst for the company.

Now Rpos is another thing where Planet D also gets hammered. it's remaining performance obligations. It went flat. Sure, it was 550 million in Q3 last year.

It's currently 560 million. So it's pretty much flat. And you know. But another thing that gets missed here.

look at the trend that we had 370 million in Rpos in Q4 of 2022. So we went from 370 million in Q4 2022 to 560 million right now. Look, it's a huge hint about where the future growth of the company is going to be at. So as RPO is starting to Trend upwards again.

and yes, sure, they're not trading up in a huge base, but they are trying to reverse the course from 370 to 560 million. That's a good sign as far as the future Revenue growth now. Look, can Palantir potentially fall even lower? Yes it can. It's possible.

Can they drop to seven dollars per share? I would say probably not. Okay, they drop to 13 per share? Definitely. So just award the warning here. The same people who were forming into the stock at Twenty dollars buying it blindly like crazy are going to be punished if they try to catch this.

Now catching a falling knife and forming into a hype stock is two sides of a horrible act that you should never do as a long-term investor. I Don't know how low Palantir can go in these circumstances. I'm trying to catch it now to make a quick swing. It's not a good idea now.

Look, Palantir has been my biggest position for years since 2020 and it's not going to change unless something dramatic happens about this company that changes my thesis absolutely completely right. I Look at the company and I see strong financials, strong foundations balance sheet clean as a whistle Three billion in cash, no debt I see Gap profitability for three quarters going on four I see 80 gross margin I see double-digit growth in a horrible year where companies were busy spending less not spending more I see AI segment being dominated by Palantir. Again, something that's completely missed by mainstream media. I See a massive government business that's going to drive dollars to palantir every economy.

Not only that, it's going to prove the concept to commercial clients and it creates a huge Network for volunteer for influence on cloud I see a sticker business look at their top 20 clients. They went from spending 470 million to over 1 billion in just three years. I see Pioneer quasi monopolizing this whole Foundry business and Gotham and not even to mention AIP So I see Palantir as a company in Pre Growth jump. So basically what I see is that penalty hasn't done its growth jump yet.

It's not even there yet. It's kind of ramping up, amping up. and that means that the road ahead. until that jump happens.

it's going to be very treacherous and very painful. And you know, look at this stock. it's up 140 percentage Still, even after that 20 Correction: with the exception of Snowflake, it's still expensive. Very expensive.

Compared to the segment, It still has very low institutional shareholding with 35 percent. Uh, BuyBacks is a step. Direction S P File inclusion is another, but there's still long ways to go to 60 institutional shareholding. Macro is still very shaky.

Moody's predicting a recession? Who knows. There's lots of Traders in this stock, guys. Lots of speculators, lots of short-term money that's going to punish you if you try to play their game. Their game is short.

Your game has to be long. But there's good news. And the good news are is that every single bear of Palantir says same goddamn thing. I Believe in the long-term business, long-term story of Palantir as a leader in AI I Just don't like the share price.

so there's not a single bear out there. that's saying that. Talent Here is a bad business. That's saying.

apparently there isn't going to dominate. All of them are saying Penalty is a great business. It's just trading at a higher multiple than I Like that means that the long term of this company is very, very bright. It has a bright future, so long-term investors in volunteer will be rewarded.

Short-term investors That flip the switch and try to trade it are going to be punished. So the way to do it and you know I'm gonna sound like a broken record. Now the way they do it correctly is by basically going out and buying a little bit of shares every single week. every single month.

Every single quarter. Whatever suits you and buy it at a very slow pace because you get three to five years to invest in the stock. There's no rush, just buy it a little bit every week and when it goes up, you buy a little bit less. When it goes down and it dips 20.

two days you buy a little bit more. It's very, very simple. You want to learn a steady system how to do it well. There's a DCA system which we employ in which we teach on our Patreon page and Patreon.com We teach a DCA model that uses the 52-week high.

We look at where the company was at, the 52-week high which is 20. We'll look at 10 below that, which is 18 and when the share price is below 18, we buy more. When the share price is above 18, we buy less. That's kind of the gist of it, but there's a lot more that goes into it.

If you want to learn the system, join a Patron Patron.com Nash You can try it out. Join a Discord Five Thousand Five Thousand members. Absolutely insane. I'm so blessed and thankful for that.

Very, very proud of the community. Join a community. The link is going to be below in the description it's going to be in the paint comment below. Shout out to the Palantir Community These are the true long-term investors and those of you who got punished short-term trading the stock I Hope you don't listen I'll see you in the next video.

Have a great weekend.