We came across a bullish thesis on Palantir Technologies Inc. (PLTR) on Substack by Antonio Linares. In this article, we will summarize the bulls’ thesis on PLTR. Palantir Technologies Inc. (PLTR)'s share was trading at $59.18 as of Nov 14^th. PLTR’s trailing and forward P/E were 303.50 and 131.58 respectively according to Yahoo Finance.

A scientist at a computer station, surrounded by a neural network of artificial intelligence code.

Palantir’s performance has defied initial expectations, especially with the company achieving a positive operating margin for the first time in Q1 2023. This margin, reaching 15.59% by Q3 2024, has grown due to the rapid productization of its digital twins, which have steadily gained traction. Palantir has been refining these digital twins for years, but only now is it realizing their commercial potential, with each incremental improvement driving non-linear margin expansion. Early investors recognized the massive potential of digital twins and Palantir’s unmatched expertise in this area. Now, as the market begins to acknowledge this value, Palantir's digital twins stand poised to become indispensable assets to customers.

Investing in Palantir has been challenging, especially during stock rises, as market euphoria contrasts with the uncertain competitive landscape. However, the long-term outlook remains promising. By 2030, Palantir’s solutions are expected to be even more integral to clients, with further operational scale and expanding margins. Despite its high sales multiple, Palantir’s current valuation could prove a historic bargain if the company’s competitive edge in digital twins holds true.

Much of Palantir’s success stems from a deeply ingrained culture of excellence, as previously outlined in early analyses. CEO Alex Karp’s leadership has been pivotal, with a focus on resilience and a commitment to values that reinforce Palantir’s unique positioning. Karp’s remarks in the Q3 2024 earnings call underscore a corporate ethos dedicated to serving Western allies while supporting American ideals. This cultural alignment has fostered a work environment where talent is cultivated, and product innovation is central, reinforcing the company’s long-term free cash flow growth.

Investors often face the challenge of resisting the urge to sell early, particularly when growth appears to be stabilizing after a strong upward trajectory. Palantir’s ongoing advancements and the early-stage commercialization of its digital twin technology may indicate that there is considerable unrealized potential yet to be tapped. The argument suggests that holding shares could position investors to benefit from potential long-term gains despite any near-term market volatility. While returns are inherently uncertain, the premise here is that a significant portion of investment gains frequently comes from a handful of standout performers—a pattern that may be relevant for Palantir, provided its growth path continues as expected.