Does Palantir have a Durable Growth Moat?

Does Palantir have a Durable Growth Moat? Making sense of the valuation of an AI champion through AGI lenses

Palantir is a poster child of an AI stock champion, but its valuation merits scrutiny. With $2.6 billion in revenues based on the last twelve months (LTM) as of September 2024, and an enterprise value (EV) of $152 billion, Palantir’s EV/sales multiple is approximately 57. This valuation is extremely high compared to its revenue and is twice as much as other SaaS champions like Samsara, Crowdstrike, CloudFlare, or ServiceNow, the only four companies still trading above 20X EV/LTM sales.

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Given the challenging growth conditions and AI disruption in recent years, it’s important to understand what underpins this massive valuation and to what ext…