Palantir Closes Above $27 For the First Time Since 2021

+ The Model 3 Moment Might Be Here...

Welcome back to DailyPalantir! Palantir closed above $27 for the first time since October 2021 and the company released a product that I believe Wall Street doesn’t fully understand yet. Let’s get into it!

$27 Close

WE CLOSED OVER $27.

Palantir moved quickly from $25.80 to over $27 within a few hours, and held above this level for most of the day, closing at $27.23. This movement broke the previous pattern where the stock had been oscillating between $24 and $26. The excitement in the market suggests that Palantir might be settling into a new range above $27, which is a positive sign for investors.

Several macroeconomic factors contributed to this price action.

One key factor was the unemployment data in the United States, which rose to 4.1%. This increase led to market speculation about potential rate cuts by the Federal Reserve to stimulate the economy. Growth stocks like Palantir, which have no debt, benefit from lower interest rates. This speculation likely played a role in the stock's rise as investors anticipate a more favorable economic environment for growth companies.

Technical analysis from Bank of America indicated that Palantir's stock has strong support levels and is positioned for continued upside. The report highlighted that the stock needs to maintain levels above $27.50 to confirm a breakout and potentially move towards $30. This technical setup, combined with positive fundamentals and macroeconomic conditions, supports the bullish sentiment around Palantir's stock. We haven’t hit 52 week highs yet at $27.50, but it was strong to see us close above $27.

Earnings anticipation also played a significant role in Palantir's stock price movement. With earnings expected in early August, there is increased optimism about Palantir's performance, especially in the context of AI. SaaS names are being asked by the market around if they actually have an AI catalyst. If Palantir can prove that to be true, they will continue to win. With the recent price action, it seems the market already feels they may end up proving it.

It really is important for Palantir to capitalize on Q2 and potentially raise guidance. If they can, the market may continue to reward them..

The Model 3 Moment

Palantir officially released their free AIP developer tier:

Palantir's "Model 3 moment" might be here.

This is referring to a significant shift in how the company plans to engage with developers and potential users through its AIP (Artificial Intelligence Platform) developer tier, which is now free in perpetuity. This move mirrors what Tesla did with the Model 3, making their technology more accessible and driving widespread adoption. By offering a free version of AIP, Palantir aims to democratize access to its powerful AI tools, allowing anyone to start building with AIP and realize its value firsthand.

Now, this accessibility is crucial for Palantir's growth because it lowers the barrier to entry for developers and organizations worldwide.

Previously, Palantir's tools were primarily accessible to large enterprises and government agencies through significant contracts. Now, with the AIP developer tier being free, individuals, startups, and smaller companies can experiment with Palantir's technology without a substantial upfront investment. This broadens Palantir's user base and creates a pipeline of potential paying customers as these users scale up their operations.

The strategic significance of this move is that it can lead to organic growth through word-of-mouth and practical demonstrations of AIP's capabilities. As more developers and companies start using the platform, they will likely share their positive experiences and success stories. This grassroots level of adoption can help build Palantir's reputation and credibility in the broader market, similar to how Tesla's Model 3 made electric cars more mainstream and desirable.

Additionally, the free AIP developer tier can accelerate innovation. I’m already getting messages by developers in India for example that have started building applications with AIP because of this free developer tier.

By allowing a wide range of users to experiment and build on Palantir's platform, new and diverse use cases for the technology will emerge. These use cases can showcase the versatility and power of Palantir's AI solutions, attracting even more interest from larger enterprises and industry leaders. It also helps Palantir to stay ahead of the competition by continuously improving its platform based on real-world feedback and applications.

Another important aspect is the potential network effects. As more people use AIP, the platform becomes more valuable. Developers can build applications and solutions that integrate seamlessly with other tools and services within the Palantir ecosystem. This interconnectedness can create a strong, self-sustaining network where the value of the platform increases as more users and applications join. It's a powerful growth engine that can drive exponential adoption.

This "Model 3 moment" also signifies a shift in Palantir's go-to-market strategy. Instead of relying solely on direct sales and large contracts, Palantir is opening up a new channel for growth through the developer community. This approach can lead to more scalable and sustainable revenue streams, as smaller developers and companies mature into larger enterprises that require more robust and comprehensive AI solutions.

It diversifies Palantir's customer base and reduces dependence on a few large clients. The way Palantir REALLY begins to scale is when anyone in the world can have access and use it.

It opens up the platform to a broader audience, fosters innovation, creates network effects, and diversifies Palantir's revenue streams. Although Palantir doesn’t offer a true consumer product, the developer tier of AIP functions as a consumer product in that anyone can immediately get access to it and when they have access to it, they can build applications or recommend the product internally within their own organization to get SMB’s on board, furthering Palantir’s GTM strategy at scale.

This is a really big deal. I expect Palantir to continue to push this hard and we should see results over the next year from it.

Karp’s New Book is Coming

Alex Karp will be releasing a book in February of 2025. I am incredibly excited. It’s not everyday that a Tech CEO with a PhD in philosophy decides to write an entire book discussing the philosophical foundation of western values at the intersection of technology while also critiquing Silicon Valley. If anything, I believe it will give even more exposure to Palantir’s brand in 2025 as investors across the world get to access Karp’s message.

I’ll be breaking it all down when it comes out.

That’s it for today - see you tomorrow!

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