During the last 12 months or so synthetic intelligence (AI) has been the principle undercurrent of the know-how sector. A small collective of megacap tech enterprises referred to as the “Magnificent Seven” have every made a collection of splashy investments throughout many areas of the AI realm.
Microsoft stands proud from the remainder of its Magnificent Seven friends contemplating the Home windows developer kicked off the latest AI revolution following a multibillion-dollar funding in OpenAI — the start-up behind ChatGPT.
Certainly, this transfer sparked a scramble amongst know-how corporations seeking to capitalize on AI in any method potential. One software program enterprise that has emerged as a reputable competitor to large tech is Palantir Applied sciences (NYSE: PLTR).
2023 was a milestone 12 months for Palantir throughout — from new buyer acquisition, accelerating income, and rising income. Given a 190% surge in share worth over the past 12 months, some buyers is likely to be questioning if Palantir may grow to be the following large alternative in tech.
Let’s dive into the specifics of Palantir’s enterprise and assess if the corporate has the potential to be the following Microsoft.
Palantir is a powerful enterprise, however…
Palantir affords 4 totally different software program suites: Apollo, Gotham, Foundry, and Synthetic Intelligence Platform (AIP). The corporate commercializes its know-how to the U.S. navy and Western allies, in addition to giant enterprises within the non-public sector. Among the firm’s notable clients embrace Lowe’s, Archer Aviation, Lennar, and the U.S. Military.
All of Palantir’s platforms are rooted in AI, with every containing distinctive and particular options aimed toward fixing subtle issues. In essence, Palantir helps companies wrangle knowledge that’s trapped in disparate methods, permitting decision-makers to run advanced queries and extra simply get hold of insights on enterprise questions.
Whereas this appears like an easy mission, the underlying know-how powering large knowledge analytics is kind of elaborate. As such, Palantir is ready to command a hefty price ticket for its software program. In line with the corporate’s filings, the common trailing-12-month income per buyer for Palantir’s prime 20 purchasers is $55 million.
Furthermore, through the fourth quarter, ended Dec. 31, Palantir closed over 100 new offers — with 21 of them being value at the very least $10 million.
It isn’t stunning that Palantir’s penetration within the enterprise software program market has led to essential strategic relationships. Lately, the corporate introduced a partnership with Oracle by which it should migrate knowledge from its AI platforms to Oracle’s cloud infrastructure.
Given how early the AI narrative is, I feel Palantir’s greatest days are very a lot forward. Nevertheless, does that essentially make Palantir the following large disruptor?
…is it the following Microsoft?
Microsoft is likely one of the most modern corporations of all time. The Home windows working system fully revolutionized private computing within the trendy period and paved the best way for Microsoft to grow to be a multifaceted behemoth within the know-how sector.
During the last a number of a long time, Microsoft has made various savvy strikes to assist enter new markets. In 2016, the corporate acquired skilled networking website LinkedIn. Following the deal, Microsoft carried out various gross sales and advertising and marketing subscription providers into the platform. This deal helped bolster Microsoft’s current productiveness functions within the Workplace Suite, in addition to give the corporate a direct line into a particular pocket of the social media panorama.
Extra lately, Microsoft complemented its Xbox gaming section by dolling out a whopping $75 billion for Activision Blizzard.
The overarching theme right here is that Microsoft is likely one of the most diversified companies on the earth. Its ecosystem spans private computing, cloud infrastructure, social media, gaming, software program improvement, and now its latest frontier — AI.
The corporate’s dominance all through the tech enviornment has garnered cheers from buyers through the years, and Microsoft’s $3 trillion valuation displays that.
Against this, Palantir is solely a software program developer proper now. In my view, I don’t see Palantir evolving in an analogous method as Microsoft. To me, Palantir does one factor extraordinarily effectively. However, Microsoft affords a bunch of various services and products for all kinds of finish customers.
This is not to say that I do not assume Palantir can compete with Microsoft on the AI entrance. Palantir’s outcomes thus far within the AI arms race are equal elements spectacular and inspiring, and I feel the corporate will stay a frontrunner within the area.
However with that mentioned, I feel buyers ought to mood expectations relating to Palantir’s ceiling and what the enterprise can finally grow to be. Whereas I do not see Palantir as the following Microsoft, I do assume it may grow to be the following large title in enterprise software program — akin to Oracle or Salesforce.
Do you have to make investments $1,000 in Palantir Applied sciences proper now?
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Adam Spatacco has positions in Microsoft and Palantir Applied sciences. The Motley Idiot has positions in and recommends Lennar, Microsoft, Oracle, Palantir Applied sciences, and Salesforce. The Motley Idiot recommends Lowe’s Firms and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
Is Palantir the Subsequent Microsoft? was initially printed by The Motley Idiot