Jack Prescott

Long term investor | $PLTR $ABCL $NU | Sharing research, news, and thoughts | Occasional memes

[Jack Prescott @JackPrescottX]

The depth of DD by @PLTRs_Palantir , @DeepValue47 & Bobcat Gang is insane. If you hold $PLTR — I’m telling you: You’re going to want to watch this stream. https://t.co/Qzecr3fLOy

This is research you’ll NEVER hear Wall Street analysts discuss.

[amit @amitisinvesting]

$PLTR

I think there is a world where Palantir can achieve 40% growth by the end of 2025:

- New catalysts and tailwinds for the government business including DOGE, renewal of contracts (as we saw with Army Vantage for $619M), increased spend on AI/software, new partnerships to create more joint contracts.

- AIP monetization is just beginning and scaling with a Pay-By-Consumption model. Palantir only has 600 customers, which is quite literally nothing compared to the amount of customers they could have. They are in the VERY early stage of getting customers onto their ecosystem and given what we know about how sticky it is (and we can see this in net dollar retention trending up), then we should see customer count growth beginning to get to the 800-1000 mark over the next 18 months.

- Palantir’s new media coverage is a compounding effect not only on the stock as more investors are getting interested but also for customers. The more their name is pitched as THE AI operating system, the more their inbound is likely increasing with more potential customers who want to sign up to a bootcamp which should drive even stronger adoption with conversions.

- LLMs are being commoditized. It’s that simple. We are in the VERY beginning of making LLMs useful and most enterprises are realizing why an Ontology matters. If the promise of enterprise AI is margin expansion and efficiency, that requires an operating system, not an LLM. As this thesis plays out, more and more companies should be integrated into Foundry and that should allow them to scale average rev per customer with AIP.

- No debt. Almost $5B in cash. FCF of $1B+. Institutional ownership above 50%. GAAP profitable. 40% growth is what takes the story to the next level.

What does this mean for the stock? Few implications…

1. We haven’t had a real market correction yet. If we do and Palantir is able to show max pain of around $60, that is REALLY bullish. If the market falls 10-15% and Palantir can hold the $60s, it only confirms our thesis that the big guys are controlling this name now and they are not letting it head lower because they want to buy on dips. I will begin buying if we see $65 and heavily begin buying if we see $50.

2. If the market does pullback hard and Palantir gets into the $40 range, the bears will laugh for a day, the bulls (many of which will still be in the green) will buy that dip. I think it will be very hard to see the $40s but no one I know who understands Palantir would be scared to add at this range again given how fast it ran from $40 to $65 and most people just didn’t get the chance to add at those levels.

3. Now, if we get to 40% growth, I’m not saying that it completely justifies the extended multiple we are trading at — but that won’t matter. What other software AI names are compounding at 40% that are actually making LLMs meaningful in an organization? OpenAI at $150B is losing money and is becoming commoditized by the day. Palantir is one of the only names that can actually scale into MULTIPLE verticals with Foundry/AIP/Apollo/Gotham/WarpSpeed and is doing so PROFITABLY. The street will pay a strong multiple for that if they can grow 40% as no other AI name will be left that can show that trajectory of growth. This means the name WILL BE EXPENSIVE probably forever but expensive should not be the “bear case” and if it is then most people will likely never get or own Palantir.

4. If we grow 40% and the stock stays flat/slightly down this year then that just means the street is consolidating in this $60-$80 range and is not giving the benefit of pulling forward any more growth. While a flat year wouldn’t be awesome, most people can’t complain as we are up more than 10x from the lows and a year of consolidation would just further provide the opportunity for more share accumulation. However, with the media coverage and excitement around the name AND a potential 40% growth story, I think many new investors/funds will begin a position.

[Matt Farley @RealMattMoney]

Many people want life changing results but laugh and poke holes at the opportunity when it is right in front of their face.

Let us hope 2025 is a better year for them.

[Jack Prescott @JackPrescottX]

Have a great weekend, ladies and gentlemen. Hope you enjoy my mediocre Karp impression:

[Jack Prescott @JackPrescottX]

December 3rd — Carl Hansen, CEO of AbCellera:

“Lilly and Regeneron in particular and there are others, but let's stick with those 2 as examples. So really excellent partners for us. And so we're very happy to expand on the work that we have been doing with them on several programs already.

They bring us exciting and challenging targets. And so that translates both into interesting learnings for us, but also into downstream positions in molecules that they believe and that we believe have significant potential.

The interesting thing about the renewal, of course, is this comes on the back of top tier drug developers in the antibody space, both undoubtedly, having seen on several programs the work that we have done successfully against very difficult targets and then also saying, hey, we've got more such target ideas and you're still the best people to work on these programs.

So in our view, that is good validation. Certainly, internally, we feel it. Clearly, the partner is feeling it. We're hoping that, that also becomes increasingly visible externally. It's nice to get recognition, but the other element to this, of course, is by deepening those partnerships, we're hopefully also laying the foundation for possible conversion of our internal programs into the hands of super capable partners if and when that makes sense.”

$ABCL

[Jack Prescott @JackPrescottX]

Haha

[Jack Prescott @JackPrescottX]

For the record: I identify with the left side of the bell curve

[Jack Prescott @JackPrescottX]

Player haters watching $PLTR annihilate their puts:

[Jack Prescott @JackPrescottX]

From the 7 Laws of Power:

[Jack Prescott @JackPrescottX]

I believe Palantir is somewhere around here

[Jack Prescott @JackPrescottX]

Pili

[Jack Prescott @JackPrescottX]

Today, I learned why companies like Palantir and Anduril are in a unique situation within the DoD.

We (normies) view a “platform” as something like an OS… Windows, Apple, Android, etc. However, the DoD uses the term “platform” in the context of hardware… The submarine platform. The fighter jet platform, etc.

These “platforms” are much easier to define a price point for. With hardware, there’s an actual cost of production (COGS). “A F-16 cost X amount of $$ to produce and it’s normal to mark up hardware by X amount, so X is a fair price”. That doesn’t really exist within software — the R&D more so acts as the COGS.. There’s not much COGS behind releasing updates on software & issuing new versions.. that’s where the R&D comes into play.

So, because of this new dynamic in price-structuring, it can be difficult to fully capture the value of software with the DoD.. they’re coming around to the concept, but aren’t quite there yet.

I objectively believe this administrative will be positive towards software-driven defense contractors. Let’s see what happens.

A paradigm shift is occurring.

$PLTR

I got this from a podcast discussing Anduril’s “Lattice” & Palantir (thanks to @matt_solomon10 for sending this to me): https://t.co/aSF7CbkCV8

[Jack Prescott @JackPrescottX]

https://t.co/r78f8c5OeV

[Jack Prescott @JackPrescottX]

Whoops. Ignore the link in my original post — this is the one:

https://t.co/Tsl6UJx3bI

[Jack Prescott @JackPrescottX]

Woah

[Jack Prescott @JackPrescottX]

I don’t own $TSLA (FML), but I disagree with EV tax credits going away as being bad for Tesla in the long run.

These other EV companies need those credits — they can barely stay afloat with them as is. This will only kill off the weak competition imo, leaving Tesla standing alone.

I wish the tax credits would stay just for the sake of trying to keep a competitive landscape (not working), but I most certainly don’t think the elimination of them will be bad for Tesla. Elon is probably happy about it

[Jack Prescott @JackPrescottX]

Happy New Year, my friends.

2024 was insane. Not only because of the immaculate gains in our portfolios, but also because of the immaculate gains in my social circle — aka, YOU fine people.

I am thankful to have met so many of you on here (even though virtual will never be the same as in-person). Here’s to 2025 and us making big tendies. It’s a pleasure to be on this ride with all of you. ❤️

[DV47 @DeepValue47]

Everyone is spending hands over fists on AI.

The only name who does not need to spend anything on the fugger is .... You guessed it, Palantir.

Sorry.....???

$PLTR