Pondering Palantir’s Political Positioning

We invest in companies, not stocks. That’s easier said than done, as there’s always a temptation to focus on what a stock price has been doing lately. The recent AI hype spurred by ChatGPT sent shares of C3 (AI) soaring. As shareholders, we’re not happy about that, because C3’s share price is now disassociated with the intrinsic value of the company. Sure, that may prove helpful if some private equity firm is trying to do some bottom feeding, but as a rule, we believe hype does a disservice to serious long-term investors. So, when Palantir recently popped after the release of their year-end results, we were interested to see if things at the company have changed much since the last time we checked in nearly two years ago.

Palantir’s Red Flags

In our piece on An Enterprise AI Showdown – C3 Stock vs. Palantir Stock, we talked about Palantir’s heavy dependency on the U.S. government, their CEO’s propensity to wax political poetic with shareholders, and their self-limiting decision to only do business with U.S. allies. A lesser concern was their decision to invest in a bunch of disparate SPACs and start round tripping revenues, a decision that clearly hasn’t been working out well so far. Let’s revisit our biggest concern – Palantir’s overreliance on the U.S. government.

Commercial revenues are on the rise for Palantir which is great, but we’d like to see the majority of total revenues coming from commercial customers