As of this writing, Palantir Technologies (PLTR 0.57%) stock has dropped more than 35% from its all-time high.
But this is no time to panic. Indeed, it's time to double down.
I believe shares of Palantir could gain more than 1,300% from their current level (as of this writing on March 13). Here's why.
Image source: Getty Images.
It's all about the long game
First off, let me explain why I chose a gain of 1,345%. Based on its market cap, $186 billion, a gain of 1,345% would result in Palantir's market cap rising to $2.5 trillion.
Currently, there are only three American companies with market caps above $2.5 trillion:
- Apple ($3.1 trillion)
- Microsoft ($2.8 trillion)
- Nvidia ($2.8 trillion)
However, in 10 years, I would suggest there will be more. Many more.
For example, 10 years ago, Facebook parent Meta Platforms was a $217 billion company. As of this writing, its value stands at $1.5 trillion. A few weeks ago, at its market peak, its value was nearly $1.9 trillion.
META Market Cap data by YCharts
The lesson? Innovative companies grow very large -- and can do so very quickly.
Palantir could become the next great technology company
Palantir, like Meta 10 years ago, is a company that is growing by leaps and bounds. As of its most recent quarter (the three months ending on Dec. 31, 2024), Palantir's revenue growth stood at 36%. That's outstanding growth and, if it were to continue at the same pace, it would mean the company's overall revenue would double in slightly over two years.
NASDAQ: PLTR
Key Data Points
Similarly, Palantir's customer base is exploding. The company's overall customer count expanded by 43% from a year earlier. Even on a quarter-to-quarter basis, Palantir's customer growth is red-hot. In just 90 business days, the company's customer count grew by 13%.
In short, organizations are lining up to see what Palantir's AI platform can do to help drive sales, improve customer satisfaction, and reduce costs. Crucially, we remain in the very early innings when it comes to AI-driven improvements in the private sector. Much of Palantir's early sources of revenue were from government organizations -- primarily defense and intelligence agencies. Now, however, the company is rapidly expanding its commercial business.
This expansion into the private sector could keep Palantir's revenue growth in the double digits for years to come. That, in turn, could be the fuel that powers Palantir to a market cap above $2.5 trillion a decade from now.
Palantir remains a long-term buy-and-hold candidate
To be clear, there are risks to owning shares of Palantir, just like any other stock. Most notably, Palantir stock is volatile. In recent weeks, shares have fallen more than 36% from their all-time high. Nevertheless, for long-term investors, these types of pullbacks are to be expected. Moreover, they're actually welcome. When a red-hot stock corrects, savvy investors assess the situation and determine whether the breakdown is due to market conditions or a fundamental change to a company's business prospects.
In the case of Palantir, I believe the company's prospects remain solid. And, therefore, I view this pullback as a buying opportunity for the buy-and-hold investor.
