When Will Palantir Reach $100? Unpacking The Bull And Bear Cases

This article was edited by Andrew Salamon, head of content at Daily Palantir. You can follow him on twitter/x here

Unpacking The Bull And Bear Cases

When it comes to Palantir, a data analytics and software firm with a somewhat mythical reputation in Silicon Valley, there's a pressing question in the minds of investors: When will Palantir's stock hit $100, signifying a market cap of $200 billion? Beyond that, is there a case where it never reaches that milestone?

Unraveling the Palantir Enigma

Palantir is unique in its offering and its position in the market. At the core, the firm seems to be stuck in a complex conundrum: Determining the exact worth of its Artificial Intelligence Product (AIP).

With its current model, Palantir services 400 clients at an average of $2.9 million per client annually. But, what if AIP could be valued at, say, $5 million for each of these clients? Simple math would suggest $2 billion in annual recurring revenue.

However, these valuations hinge on understanding the true potential of an integrated language model (ILM) for enterprises. Especially when it's not just for niche uses like sales or marketing, but spans across an organization's entire operations.

The Road to $100: It's All About Scaling

A key pathway to achieve that coveted $100/share valuation? Scaling. Consider a world where, by 2030-2035, Palantir expands its client base from 400 to 2,000. That's where the magic could happen.

But, and it's a significant but, it all circles back to the success of AIP. As the primary bull case, AIP needs to permeate sectors from energy to healthcare and beyond. The belief? Introduce AIP as the stepping stone, make it indispensable, then sell other services around it. A model reminiscent of how companies may offer foundational services for free, hoping to entice customers into buying more advanced (and expensive) solutions.

The Bear Shadow: Competition and Stagnation

But what about the naysayers, the bear camp? Their concerns are valid. The bear scenario is stark: What if Palantir can't sell its flagship products? What if competitors like Databricks or Snowflake roll out superior generative AI applications? The implications of such scenarios are dire for Palantir's ambitions.

AIP: The Trojan Horse Strategy?

The AIP versus Foundry debate is intriguing. While AIP might be the shiny new offering capturing imaginations, some insiders suggest that it's really Foundry that monetizes. In this perspective, AIP acts as a "Trojan Horse," enticing enterprises with its capabilities. However, once companies are hooked, they find the real value in setting up Foundry, Palantir's platform to organize and structure data.

Predictions Galore

So, let's get down to brass tacks. When can we expect the stock to hit that $100 mark?

• Optimistic Outlook: 2026. With the economy potentially booming and an AI surge, coupled with supportive monetary policy, it might just be the perfect storm for Palantir.

• Realistic Bull Case: 2027 to 2032. With the expansion of Palantir's client base and the potential increase in value of AIP, achieving a market cap of $200 billion within a decade seems plausible.

• Bear Scenario: Stagnation. In this less rosy picture, Palantir's software doesn't evolve, deals dry up, and growth grinds to a halt.

In the fast-paced, ever-evolving world of tech and AI, predicting the future is always a gamble. But one thing's for sure: The journey of Palantir, with all its potential ups and downs, will be one to watch.

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