Alex Karp Drops MULTIPLE HUGE Interviews

This week was big for Alex Karp.

Welcome back to DailyPalantir! This week, Alex Karp did 2 interviews, one with CNBC and one with Axios. In both, he made some pretty interesting claims that we need to discuss and dissect — some being about Palantir’s role in Israel, and others being direct numbers on Palantir’s business. Let’s get into it.

Karp Is Bullish on AIP

Some quotes from Karp over this past week in public interviews:

“84% of the top 50 tech startups are in the US — now this is basically pre AIP, what do you think is going to happen? My company is worth between $35 and $40 billion. I'm pretty optimistic we're going to continue to grow and get bigger, probably going to $60 billion. Any one of the products we built would be the number one startup in Germany.”

“I mean look, our US commercial. product is growing so quickly that we're going to have to rebuild the whole company and the reason it's growing so quickly is because the beginning of the AI Revolution was not large language models, it was in the military. We learned a lot of lessons there that are people learning now.”

Okay, so let’s break down these quotes.

First — on marketcap and valuation.

I think Palantir’s lawyers probably got upset when Karp so explicitly said that he thinks the company can double in valuation, but it speaks to his bold confidence around where the company is going. Saying the company can double assumes that growth is going to meaningfully reaccerlate past the current 17% top line growth rate, hopefully closer to 30%.

The thing shareholders can take away from this comment is in the context of how Karp said the company can double, which was when he was asked about AI startups. His point was that most of them are in the United States and receiving decent premiums on their valuation, but very few have actual AI products that are deployed and operationalized across enterprises.

So if these startups, that likely will fail, are getting a premium — what could a company like Palantir get for having something real, AIP, that is scaling?

It makes sense for him to be this confident and I feel that even if Q4 numbers don’t massively beat, guidance can. This is why Karp seems to be so confident, because if he knows they are going to guide well, then he knows what the company is going to be capable of in terms of it’s growth.

Speaking of Q4 earnings…

The only 3 metrics that I care about going into $PLTR Palantir Q4 Earnings Feb 5th: 1. Customer Count Growth --> we need to grow customers QoQ higher than the current stagnated 8%, I'm hoping for closer to 10-12% this Q

2. Net Dollar Retention --> this has been going DOWN all of 2023, it needs to start a reversal to show our existing clients are continuing to pay more than what they signed up for

3. Guidance --> this is the MOST important, we can miss every metric on this Q4 earnings but guide for 25%+ and be back to a high growth tech company.

If guidance comes in below 20%, it can get ugly. If it comes in at 25% or above, we should have a strong 2024. My guess, being very conservative, not trying to get hopes up, is around 22-23% -- with the expectation that by mid 2024 guidance gets raised to 25%-30%.

Second — on the quote about the US commercial product growing.

This was actually a very interesting thing for Karp to say. It’s not like he hasn’t mentioned before that the US commercial product is “growing like a weed,” or seemed optimistic about it’s growth. But this time, he mentioned that they would need to rebuild the entire company, implying that they would have to hire more and position the company’s talent in a way that can deal with all the demand from clients in the US on their AIP product.

If he is right about this, we are going to see more top line growth in revenue. I am going to give 2 more quarters before it seriously scales, so I don’t expect it in Q4, but if Karp is serious about needing to rebuild the company because of all this growth, the numbers will show it.

Overall, this week gave us a strong look into his eyes as the CEO witnessing the demand from clients and further proving the AI narrative.

Karp’s Public Stance on Israel

Along with talking about business, Karp also discussed the company’s public stance on Israel at the WEF Davos Summit.

The part I want to highlight here, I believe, was unequivocally the most THOUGHT PROVOKING part of what Karp had to say.

After explaining his support for Israel (which in a nutshell is about defending democracy and protecting the existence of a Jewish state), Andrew Ross Sorkin (the interviewer) pushes back — asking why Palantir doesn’t speak on other social issues if they are so passionate about this one (other issues including trans rights, BLM, MeToo movement, etc.) And then Karp drops a hammer…

He goes on to make 2 big points:

- All those CEOs speaking about those issues are not saying ANYTHING about what’s happening now

- How do we TRUST those CEOs (the topic of conversation at Davos was about “Trust”) about other social issues and how they lectured us over the past 5 years on how to think when they won’t even SPEAK UP on their opinion (whether pro Israel or not) when it’s FINALLY TIME TO SPEAK UP following the worst terror attack post 9/11!!!!

I mean you think Sorkin had a gotcha question and the way Karp flipped it on it’s head…

His core point was that in private conversations, every CEO tells him they support Israel but don’t want to take the heat of saying it publicly…yet they are happy to support every “ism” under the sun because THEY WONT GET BACKLASH which means it really DOESN’T MATTER if they speak publicly on those issues.

But when it’s finally time to actually take a stand…they become cowards.

Whether you agree with Karp’s stance on this or not is actually not important, what matters here is if you think he is being honest.

So many corporate CEO’s have tried to push social narratives down our throats as consumers based on what THEY felt was the right belief system to have — they never recieved backlash because it was always the politically correct thing to do. Now, whether or not they support Israel (many of them do), they are refusing to give their opinion because of the potential backlash. This begs the question about why they cared so deeply on other social issues and if we can even believe they genuinely felt any of the things they said because of their lack of having a public opinion on one of the worst terror attacks since 9/11.

This was Karp’s core point and overall logic to be so public — if Palantir isn’t public about certain social issues, they likely don’t care about them. That’s why they aren’t speaking up.

The one time they do speak up, even if you disagree with them, you can trust that they authentically believe in what message they are trying to put out into the world.

Alex Karp is Releasing…A Book?!

Okay, so this was some pretty big news.

This year could not be starting off better for people who cover Palantir.

How often does your CEO actually write an entire book!? There is going to be A LOT to break down in the coming months.

The book is called “The Technological Republic,” and it highlights the core problems with Silicon Valley. For people that have kept up with Palantir, it probably won’t be that different of an argument that we’ve heard from Karp in various keynotes.

However, writing a book does establish a certain level of credibility and authority that many people will take seriously. It’s one of the most Alex Karp things to do — his academic background and PhD make him someone who would enjoy the prestige that comes with writing a book that gets taken seriously from those in the tech/geopolitical sector.

I think this book is going to get many people talking…it’s probably some of the best marketing Palantir can do for Karp’s brand…and I imagine those that agree with his statements will be more interested to invest in Palantir.

I will be breaking it down, chapter by chapter, once it’s released.

My Product Update

I told you all I was working hard on a tech product specific to Palantir for the past few months.

It is getting close to done. We are aiming for a end of Feb launch.

I am very, very excited about this product. The newsletter will see it first before anywhere else, so you all will get the first chance to sign up and use it.

It will cost $5/month, or $42.69 (30% off) for the whole year.

My biggest learning over the past year: make something people want to use daily, or at least weekly, so when they see that $5 charge — they don’t think anything of it. The value should far exceed the price.

For the cost of 2 Palantir shares a year, this product will be a no brainer to have if you have any position in Palantir that exceeds 5 shares. In fact, I believe there will be an opportunity cost to your time if you don’t have this product because of how useful it is. There will also be a 100% money-back refund if not satisfied — I just really think anyone who cares about Palantir will want this product for as long as they keep their shares, so if you plan to hold till 2030, this will be a product you want till then.

I believe the value in this product is going to allow you to pay $5 a month within seconds of using it. I personally am using it everyday and it’s one of the most fun, useful products I’ve ever built. I think we can get to 1000 paying subs by the end of the year.

If anyone has upgraded to paid on the substack — you all will get access to it for free since the paid substack is $8 a month anyway (again I don’t do any exclusive paid content so deeply appreciate anyone who upgrades on substack just to support.)

IT’S GOING TO BE PRETTY COOL when it launches but I’m in no rush. I want it to be as perfect as possible, have the least amount of bugs, and be ready for primetime when it’s out into the wild.

Need to make it so rock hard that even if you think of your old english teacher from high school you still don’t get soft.

And with that, I’ll see you tomorrow!

Thank you for reading and I’ll see you tomorrow in your inbox!