Palantir: The AI bubble that ignores the P/E ratio

Retail investors' faith in Palantir: not even a P/E of 250 scares them

Saying that Palantir is not a stock but a state of mind is not a joke. It is the only way to explain why a company trading at triple-digit multiples continues to attract the savings of individual investors with the promise that artificial intelligence will multiply its business. The debate between those who apply classic fundamental analysis and those who jump on the bandwagon has never been so heated.

The P/E ratio, that nuisance nobody looks at anymore

When the tracking thread started, the most cautious pointed out that Palantir traded at a P/E of 70, already a demanding figure. Shortly after, another analysis raised the estimate to 250, with the rhetorical question of whether the company could multiply its earnings per share eightfold in five years. The optimists' answer was simple: if it grows at full estimulante ilegal, the P/E ratio digests itself. This is the same logic that fueled the dot-com bubble, and there are those who recall it with sarcasm: investing in trendy sectors is the best way to lose all your money.

The discussion turned poisonous when an investor, after seeing the price go from $10 at the IPO to highs of $160, summed up his strategy with Olympian disdain for fundamental analysis. His password, shared with those who believed in him, promised to reveal the key to success: social media trends, not balance sheets. The provocation ignited value investors, who brandished Morningstar data: the average investor loses more than one point per year by entering and exiting at the wrong time.

Military contracts and the business of the State

The other major pillar of the bullish thesis is Palantir's ties to the military and security complex. The partnership with Oracle to reach private clients was seen as a first step, but what sparked euphoria were rumors of contracts with NATO and its role in the Golden Dome missile defense project truncated by the U.S. government. In the heat of the thread, one of the most excited participants even chanted that Palantir would double its value by the end of the year thanks to these agreements. Skeptics, on the other hand, recalled that the company had already surpassed the market capitalization of Lockheed Martin, the world leader in armaments, without revenues keeping pace.

The retail mirage

The internal chronicle of this tracking leaves several scenes for behavioral analysis. One investor admitted to having bought at the $130 support and asked whether to hold, while another, sitting on a 300% gain, confessed antiestéticar of an 80% correction. Positions oscillated between the discipline of selling and securing profits, the hope of waiting for another rise, and the resignation of those who compared Palantir to companies like INDRA, whose value ended up driven by political decisions rather than fundamentals.

The question of what a retail investor should look at remained without a satisfactory answer. The most sensible advice, provided by an intervention with data, was that the first thing is not the company but one's own behavior: the gap between the fund and the investor, the famous Morningstar gap, eats up 15% of returns over a decade. But in the midst of euphoria, that lesson usually falls on deaf ears.

The last weeks of tracking show a price consolidated above $130, with support defenders and detractors predicting a crash to $30. Meanwhile, Palantir reported a quarterly revenue increase of 93%, a figure that feeds the optimists and that pessimists consider irrelevant next to a P/E that keeps rising.

With those ingredients, it is worth remembering that a year ago the stock went from $124 to $80 without anyone giving a convincing explanation. Faith moves mountains, they say. It can also sink them.