I’ve written about Denver-based software company Palantir Technologies (NYSE:PLTR) at least three times since arriving at InvestorPlace in my puke-green 1975 AMC Pacer. And my feelings about PLTR stock may be pretty similar to yours regarding my shag-carpeted lemon (lime?).
All I’ve seen is underperformance, unrealized hype and whole lotta rollercoaster. And I don’t mean “Love Rollercoaster.” Gotta love that way-funky tune the Ohio Players released the same year my Pacer wobbled off the assembly line.
Actually, I don’t own a Pacer. Nor do I see this investment setting any kind of steady pace.
Since January, PLTR stock has gone up 50%, down 20%, up 23%, down 29% – and from Feb. 9 to date, down more than 35%. If you wanted to buy the dip in the first quarter, you’d have best brought a stopwatch and plenty of Maalox. But hey: At least things have been pretty Dullsville since March, with the stock as flat as a floppy disc.
And yet, this tech investment that represents in EaaS (enigma as a service) has its share of steadfast fanboys, particularly on Seeking Alpha. “Palantir is in a unique position to be a leading beneficiary of the big data revolution in the years ahead,” writes Andres Cardenal.
To be fair, he’s got a great track record. But the data he’s crunching here doesn’t include how many time hopeful shareholders have looked to this phenomena as Palantir’s boon … so far to no financial avail.
PLTR Stock: The New Fool’s Gold
To that end, Cardenal contends that “Data is the new gold” – acknowledging it’s a cliche, but insisting it’s true. Well, here’s my equally cliched rebuttal: PLTR stock is fool’s gold, the mother of all wait-and-see investments. Just because data, 5G technology or anything else with a byte in it is taking off doesn’t mean every company in the market stands to soar.
Here I have two words for you: Diamond Rio. Introduced in 1988, this MP3 player beat the iPod to the market by three years. And if you have one lying around, it might fetch $5 as a paperweight at a garage sale. A Rio disappointment, so to speak.
And so here’s the rub with Palantir. So far, it has failed to prove it has anything going on that puts it ahead of the pack or even in the middle of it. That leaves plenty of elbow room for much bigger competitors outflank it – which I definitely believe they will. Ask yourself: What’s so special about Palantir’s product line that no one else can replace, imitate or improve upon it?
Demo Day Disappointment
I also think back to the Jan. 26 Demo Day event that showed off its Foundry, Gotham and Apollo products. I assume the purpose was to fuel inject the company’s PR efforts and cheer eager investors. And so?
While some investment mavens drooled themselves a full bucket, media coverage amounted to an empty cup. A Steve Jobs “just one more thing” rock show it definitely wasn’t.
No headlines, maybe a handful of stifled yawns and – here comes more data – PLTR stock shed a quarter of its value in the following month. A Demo-ralizing Day for shareholders, I’d say.
Not Quite a Contender
Here I will say again what I’ve so often said before: I take no delight in getting such buzzkill forecasts right. If shareholders profit and observers like Cardenal nail it, I’ll gladly eat my hat, even if it’s an Honest Abe stovepipe special on steroids.
But in my attempts to build a portfolio of adventurous growth properties, I simply don’t consider PLTR stock a contender. Nor should you. Aside from the nagging issue that Palantir has failed to turn a profit since going public last October, I know of no case to suggest this wannabe growth company has cornered the market on something, anything extraordinary.
With a market cap of just $46 billion, Palantir would benefit greatly from a blockbuster that would buy it time to spread its wings, as is often the case with small pharmas.
Palantir’s World Is Flat
And so, I present a final set of digits that PLTR stock fans might want to take to the data-driven bank. So far in 2021, Palantir is unchanged. But the Dow Jones Industrial Average is up 15%.
That this company can’t ride the tide that’s lifting all boats, let alone kick some butt in a market brimming with rich tech investment opportunities, simply does not compute.
On the date of publication, Lou Carlozo did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.