Palantir Surges 356% in 12 Months, Outpacing Bitcoin

Palantir Technologies, a North American data analytics company, has recently made headlines with its stock surging to an all-time high of $109.60 on Feb. 6, marking a 356% gain in 12 months. This impressive performance outpaced Bitcoin's 121% price increase over the same period, leaving investors questioning whether Palantir will continue to outperform the cryptocurrency and whether the factors driving its bullish momentum remain intact.

Founded in 2003, Palantir has strong ties to government agencies, particularly the US Department of Defense and the Central Intelligence Agency. Its commercial offerings focus on supply chain logistics optimization and operational planning. The company's recent success is attributed to the growth of its artificial intelligence platform, with fourth-quarter revenue rising 36% compared to 2023. Numbers released on Feb. 3 revealed a 45% operational margin, and its cash and equivalents position increased to $5.2 billion. Palantir shares have risen 36% since Jan. 29, leading to a record-high $245 billion market capitalization.

Investors seeking exposure to the AI sector may see an opportunity, as Palantir trades at a significant discount compared to Microsoft's $3.1 trillion market value and Google's $2.3 trillion. However, Palantir's fourth-quarter EBITDA stood at $380 million, which is roughly equivalent to one day of revenue for Google's parent company, Alphabet, making it 98.8% lower.

The connection between Bitcoin and Palantir may seem remote, but it's hard to argue that the company offers real utility or dividend potential when its valuation is 162 times higher than its earnings before interest, taxes, depreciation, and amortization (EBITDA). In reality, much of Palantir's value is based on speculation. For comparison, Google trades at a 19.5x EBITDA multiple, while Microsoft trades at a 21.5x multiple. This gap could be justified if the market expects Palantir's technology to drive earnings up by 8x over the next few years. However, it's more likely that traders are overreacting to strong earnings momentum and are entering the FOMO territory with Palantir stock.

Investors often