Why Cathie Woods Cannot Stop Buying Palantir Stock! (10 Million PLTR Stock Shares Purchased) (PLTR)

0:00 If you are short-term in your focus um you probably don't want to spend too much time investing in palantir palantir's attitude is refreshing it's exactly how we invest we want our companies to invest aggressively we don't want profits now we want them to invest aggressively because we're moving into many winner take most markets lately kathy woods from arkhanvest has been loading the boat with palantir stock and now her firm park invest actually owns

0:32 Over 10 million shares of palantir stock palantir's management has a long-term mindset and this really resonates with kathy woods they're spending a ton of money today to build up those technological moats and strengthen those customer relationships so that they can eventually catch as kathy woods says a very large wave today on nine to five investing i'm going to explore what makes cappy wood so bullish on palantir stock and then after that i'm going to reveal

1:02 To you a very clear catalyst for palantir stock price that is actually just around the corner nine to five investing in a recent cnbc interview kathy woods actually revealed a key tenant of her investment strategy during market corrections and market crashes essentially if the stock market starts crashing kathy woods sells off her most speculative place her lower conviction type of stocks and she takes her firm's capital and basically reallocates that capital

1:37 To her highest conviction stocks these top tier highest conviction type of stocks include most famously tesla but in addition to tesla we actually have palantir making this list as well now i actually can really appreciate the strategy from kathy woods because no matter how bearish the stock market gets an investor can just simply sleep better at night knowing that their money is parked in the companies that they have the highest conviction in if you can eliminate that fear

2:08 Uncertainty and doubt or as a lot of people like to call it bud from your investing psyche then it will make your investing experience much more enjoyable and i highly recommend trying to take this approach now am i surprised that kathy woods has palantir stock on her list of high conviction long-term buys not at all palantir has a ridiculous amount of bullish fundamental characteristics going for it long term i do however want to talk about something that

2:41 Cappy woods said in the cnbc interview that really stuck out to me revenues are still 61 government but i've learned and i think most people in the innovation space have learned over time that some of the most important innovations uh in our lifetimes have started in the government especially in the in the defense sector and in the intelligence sector so we think in many ways and they won't talk about how but they're certainly garnering a lot of business which tells us

3:13 That they are seeing in the future and investing in the future in in ways that companies governments but but increasingly companies are going to need kathy woods points out that some of the most important innovations in her lifetime have actually started as projects within the united states government more specifically projects within the defense or intelligence agencies and in my personal opinion kathy woods is 100 correct about this observation just take

3:48 A second and think about what is the most significant innovation within the last 50 years or so that has completely changed the way the world works in my personal opinion and leave a comment below if you have a different opinion on this but i think it's the internet guess what 9 to 5 game the internet actually was started as a us department of defense project that was designed with the sole purpose it was called arpanet by the way but it was designed with the sole

4:19 Purpose of allowing government agencies to disseminate information in case the united states was attacked by the soviet union with nuclear weapons arpanet stands for advanced research projects agency network and it was originally only accessible by those organizations that had contracts with the us department of defense and other governmental agencies eventually the government made some changes to arpanet so that it would be available to the general public and that

4:50 Became the very primitive version of the internet that we use today by the way if you are new here if you are new to 9-5 investing thanks for being here if you want to hit that mouth-watering subscribe button and i would really appreciate it it helps the channel and it's free to do when analyzing the fundamental strength behind palantir stock as an investment there is a clear weakness and that clear weakness was brought up by kathy woods herself the weakness is that about 61 of their

5:18 Revenue is actually derived from government contracts however the trend is positive the trend is towards a more diverse mix of corporate and government contracts and it's definitely worth pointing out that the strong demand from the united states government for volunteer software and services really helps palantir build their reputation if the united states government is spending millions upon millions of dollars every year on palantir software and services then

5:47 Corporations are going to look at this situation and they're going to be less hesitant to sign major deals with palantir themselves i mean it already seems like palantir's reputation has been built up enough to gain some major corporate customers because at the time of recording this video palantir already has a lot of notable corporate customers including fiat chrysler airbus morgan stanley and bp and just as a side note anyone remember bp british petroleum they are actually

6:17 Responsible for the largest oil spill in history well consequently british petroleum is trying to clean up their corporate image so they have an ambitious goal kind of ambitious i guess to go zero emissions by 2050 and palantir has actually been commissioned with helping them achieve this goal through taking multiple sources of data from bp systems and basically synthesizing it to determine how they can actually become zero emissions without cutting too much into

6:49 Their profit margins and i believe palantir software is catching on very quickly uh just to prove my point they actually had a press release when i was planning this video that they have a new six-year partnership with a french automotive supplier called farishia to help ferisha basically go zero emissions as well so clearly corporations are catching on one by one about how much value palantir software and services can actually bring them so as time goes on it seems like they're

7:21 Going to be less and less dependent on just having government contracts for their revenue and the reason this is significant is because at any time it could be for political reasons it could be for just just out of randomness they could lose those government contracts it's unlikely because it doesn't really seem like there are viable suitors for those contracts at this time but then again a lot of them are secretive we don't know a lot about some

7:46 Of these contracts so it is very nice to see palantir diversifying their revenue sources kathy woods says that palantir's long-term mindset investing into their business to build those ridiculous competitive moats i want to revisit that topic because alex carp the ceo of palantir had some really interesting things to say on the last earnings call that ernie's call was for 2020 by the way so i'm going to play an excerpt of alex carp speaking about palantir's long-term

8:17 Focus and why this is important and i'm just going to play some drone footage from a trip i took to iceland in 2019 because that's honestly a lot more engaging than just a black screen or just a still image of alex carp and now as we've had a pretty sublime year based on any conventional metric and as you've seen the results we want to underscore uh this relentless focus what you could call an insight secret it which should be a finality of business of a long-term

8:48 Focus on the health of what we believe is and will continue to be one of and will become the most important software business in the world and to do that we're providing long-term guidance pretty pretty radical in the sense that we're we are we are committing to keeping a growth threshold of above 30 for the next five years but not focused on the the day-to-day quarter to quarter a near-term focus that quite frankly destroys businesses is one of the main reasons why so many

9:16 Of our businesses especially in tech are actually only serving wall street and not serving their clients and not serving average an everyday investor and and generate sub-optimal returns over time because they too are a lagging indicator of the sub-optimal performance near-term my myopicism of of of of running a business and the pound here obviously we have rejected this in every way both from the way we've produced uh software from the way we interact with clients

9:46 From the bets we've made that tend to be vets that come to tradition years after a very very significant investment any case we hope those of you on this call who are our current investors uh stay with us and those of you who prefer a more short-term focus that you choose companies that are more appropriate for you honestly the last part of that excerpt where alex cart basically tells short-term investors they can just take a hike he does not care if they buy his stock or not

10:17 Alex carp is really just focused on the long-term health and growth of palantir's business which is exactly what i like to see in a ceo i really personally believe that palantir stock is something that you just buy and then you forget about for the next 10 to 20 years and then you come back and you see your investment 10x it's that type of company you don't want to trade this company you probably just want to hold it i listened to palantir's entire

10:44 2020 earnings call so that you don't have to and i pulled out the key financial figures that they talked about so here are some key metrics that should really make you excited about the trajectory of palantirs business over the next five years or so from 2019 to 2020 palantir saw a growth of 41 in year over a year average annual revenue per customer palantir is collecting an average of 7.9 million dollars from each customer each year so this growth of 41 is incredible

11:21 Because it really demonstrates the value that palantir is providing to its customers because palantir gets in there they get comfortable with their clients and then their clients test the services and they decide they want more i mean 41 that's profound palantir's overall revenue growth rate from 2019 to 2020 is actually 47 and they actually signed in the fourth quarter of 2020 alone 21 deals worth 5 million or more now the other side of this equation that

11:56 Is not ideal for palantir is that they are actually overall losing money their expenses are exceeding their revenues but i am okay with this because palantir is building a business they're trying to build competitive moats that are so dramatic that it will be almost impossible for competitors to eat their lunch so they did discuss palantir's margins on the conference call i'm not going to get into them here though because it gets really kind of sticky you can talk about

12:26 Net profit margin operating margin and gross margin but i will tell you that the margins seem to be trending in the right direction i believe if palantir wanted to be overall profitable for fiscal year 2021 they could be but they are not focused on profitability so quickly they are focused on spending more money now basically investing in those tall competitive moats and those really rock solid customer relationships so they're building the long-term business rather

12:58 Than just being focused on being profitable right out the gate of them having their direct listing so what is likely to be the next massive catalyst for palantir stock price so it is impossible to know for sure what the next catalyst for palantir stock could be because there could be some major contract just randomly announced like today we actually already had as i mentioned earlier that a french automotive supplier contract announcement but a very likely candidate for a next

13:30 Major catalyst for palantir stock price is going to be the double click demo event that palantir announced earlier this week this double-click event will simply give palantir the opportunity to demonstrate how their platforms operate in different industries and with different clients the actual event will take place on april 14th 2021. now normally i would not put too much weight into a demo that palantir is hosting however earlier this year in late january actually palantir did have another similar type of demo event and this sent this talk on an absolute moon mission this event was called the inaugural demo day it took place on the 26th of january and it basically just gave palantir the opportunity to showcase some of the most recent developments to their platforms including gotham foundry and apollo and whether

14:27 This run and palantir stock price from about 26 dollars per share to a high of 45 dollars per share was actually based on the demo or the advancements of the uh platform shown at that demonstration or if it was just randomness it's really completely unclear to me but one thing is for certain i'm going to be paying attention to this next demo day to see if there is a similar type of action and palantir stock price remember it is very likely that simply

15:00 The anticipation of this double click demo day is going to cause a rise in palantir stock price however you have to remember the other side of this a lot of the times if there is news for example the news being you know whatever is unveiled at this demonstration event then a lot of the times if the news is not incredibly impressive then the stock will actually sell off this mantra is called sell the news it happens all the freaking time including on that last demo day

15:31 The stock actually crashed after the demo day was over so i tell you to sell the news pattern just to kind of warn you to be careful if you are trading in this stock rather than investing in it you definitely want to watch out because if nothing major is announced on that doubleclick demo day it is very likely especially if the stock price dramatically rises from now until then that the stock price will actually crash after the demonstration is over i

15:59 Really wouldn't recommend trading the stock i genuinely believe i'm not sure exactly what the right price is right now but i genuinely believe if you are going to invest in palantir stock this is totally a set it and forget it type of investment check it in 10 years and it's probably gonna be worth multiples of what it is today if you are still watching at this point thank you so much for supporting the channel by watching the video all the way through helps a lot actually

16:29 And also thanks in general just for taking a part of your day to hear me ramble about palantir stock