Palantir beat estimates again. How high can the stock go?

This margin-boosting trend is likely to continue as interest in AI increases and Palantir's established government relationships and applications in industries such as healthcare, manufacturing and insurance give it an advantage.

The company was early to integrate with large language models, but CEO Alex Karp argued that LLMs are effectively a commodity and what makes the company special is that it gives companies and government agencies the ability to run LLMs with their data. In addition, Palantir says it has already developed the AI ​​applications so that its customers can benefit from the new large language models. Management also noted that the cost of AI inference has fallen sharply, which should encourage more companies to adopt Palantir's AI tools.

With $3 billion in revenue, Palantir is still in the shadows of established software companies like Microsoft And Salesforce. However, the company forecast a total addressable market of $119 billion at the time of its IPO in 2020, and this is expected to be significantly larger today due to the emergence of generative AI.

Given its accelerating revenue growth, unique product portfolio, and competitive advantages in AI, Palantir appears well-poised to capture a larger share of this addressable market, as it currently has less than 3% of it.

In other words, given TAM's size and current momentum, the company is expected to double, triple, or even increase its revenue 10-fold in the long term.

If we manage to continue on this path, the stock will continue to rise. Although it might be easy to be skeptical of Palantir after its rise this year and high valuation, the company just proved why it's a winner.

Have you ever felt like you missed the boat when it came to buying the most successful stocks? Then you'll want to hear this.

On rare occasions, our expert team of analysts will provide one “Double Down” shaft Recommendation for companies that they think are about to collapse. If you're worried you've already missed your investment opportunity, now is the best time to buy before it's too late. And the numbers speak for themselves:

• Amazon: If you had invested $1,000 when we doubled in 2010, You would have $22,469!*

• Apple: If you had invested $1,000 when we doubled in 2008, You would have $42,271!*

• Netflix: If you had invested $1,000 when we doubled in 2004, You would have $411,970!*

Right now we're issuing “Double Down” warnings for three incredible companies, and such an opportunity may not exist in the near future.

See 3 “Double Down” Stocks »

*Stock Advisor returns from November 4, 2024

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Nvidia, Palantir Technologies, and Salesforce. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has a disclosure policy.

Palantir beat estimates again. How high can the stock go? was originally published by The Motley Fool