Up 203% in a year, you could say that Palantir's (PLTR 3.73%) stock is red-hot.
But is too hot to handle? Let's take a look.
What Palantir does
Palantir, named after the 'seeing-stones' in Tolkien's Lord of the Rings novels, is an Artificial Intelligence (AI) and data analysis company.
Through its platforms (such as Palantir Gotham and Foundry), the company assists public, private, and non-profit organizations through big data analysis, which helps leaders gain insight into hidden patterns within data. As a result, Palantir's customers can often develop better, more efficient processes that improve outcomes and lower costs.
Who is -- and isn't -- already using Palantir's products
In its most recent quarter (the three months ending on Dec. 31, 2023), Palantir reported total revenue of $608 million. However, only $131 million, or roughly 22%, was from U.S. Commercial customers.
That leaves Palantir plenty of room to grow (its U.S. commercial revenue is growing at 70% year-over-year). Moreover, as you can see in the chart below, Palantir still hasn't penetrated many large and lucrative sectors of the American economy.
Image source: Statista.
For example, according to Statista, only four healthcare companies have signed up with Palantir's flagship Gotham platform. Similarly, only five finance companies have done the same. As for telecommunications -- a sector rarely known for excellent customer service and efficiency -- only one company is using Gotham so far.
Is Palantir a Buy Now?
To sum up, Palantir is an up-and-coming company with a product that can deliver meaningful efficiencies thanks to its AI-driven analytics.
While its U.S. customer base is growing rapidly, the company has yet to penetrate many key industries and sectors, such as healthcare, finance, and telecommunications.
For investors looking for a stock with a long growth curve ahead of it, Palantir is a name to consider.
