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Alright, let's get this straight. Palantir? A stock split? Give me a freakin' break.
The Hype Machine
So, Wall Street's buzzing about a potential Palantir stock split. Why? Because apparently, retail investors are "largely focused on the potential for a stock split," according to some RBC Capital analyst. Well, offcourse they are! They're sheep! They see "stock split" and think "easy money." It's like Pavlov's dog, but instead of a bell, it's financial manipulation disguised as opportunity.
A stock split, for those of you who haven't been paying attention, is basically just slicing a pizza into more pieces. You still have the same amount of pizza, just smaller slices. In theory, it shouldn't matter. But in practice? The stock price tends to jump. Why? Because, as the article points out, maybe a lower price point brings in new investors. Or maybe it's just pure hype.
Last year, Chipotle, Nvidia, and Broadcom saw their stock prices skyrocket after announcing splits. Chipotle was up 66%, Nvidia a ridiculous 121%, and Broadcom a face-melting 170%. But here's the kicker: Chipotle's growth has since stagnated, and its stock is down nearly 30% since the split.
So, what does that tell you? Splits aren't magical. They're a sugar rush, a temporary high. And if the underlying business isn't solid, you're gonna crash hard.
Palantir's "Fundamentals"
Now, I'll admit, Palantir is doing some interesting things. They're actually operating in the black, which is more than can be said for a lot of these AI hypebeasts. And they're growing sales and earnings by double digits each quarter. Their whole "bespoke, tailored-made application of AI" thing seems to be working... for now.
They send their "forward-deployed engineers" to work directly with clients, customizing AI systems. It's like having a personal AI tailor. Makes the whole implementation more effective, efficient, and "sticky" for the client. And let's not forget their "cozy relationship with the federal government," which is basically code for "they're making bank off taxpayer dollars."
Wedbush analyst Daniel Ives is practically orgasming over Palantir, saying it has "trillion-dollar potential" and raising his price target to a "Street-high" of $230. He thinks the company will reach a trillion-dollar market cap within two to three years. Palantir (PLTR) Stock: Wedbush Raises Price Target to $230 Ahead of Earnings November 03
Seriously? A trillion-dollar market cap? That's insane. That's delusional. That's... well, maybe I'm just jealous I didn't buy in earlier.
The Valuation Problem
But here's the thing that keeps me up at night: Palantir's valuation is absolutely bonkers. The stock trades at a price-to-earnings ratio of more than 620. 620! That's not stretched; that's ripped, torn, and thrown into a black hole. Palantir would have to grow its earnings ten-fold just to approach reasonable levels. Even then, it would trade at a P/E nearly twice that of Alphabet.
We're talking tulip bulb mania levels of absurdity here.
And sure, Wedbush is all excited about Palantir's "bootcamp model" and how it's delivering quick sales cycles. But let's be real, bootcamps are just glorified sales pitches. They're designed to get customers hooked on the Kool-Aid before they realize how much it's going to cost them.
Increased AI investments under the Trump Administration, including Project Stargate, could benefit Palantir’s government business segment. Great. More taxpayer money funneled into a company that's already obscenely overvalued. What could possibly go wrong?
It's All Just a House of Cards
Honestly, I wouldn't touch Palantir stock with a ten-foot pole, stock split or no stock split. It's a classic case of hype over substance, and the fundamentals just don't justify the price. This whole thing reminds me of that time I bought a "rare" Beanie Baby on eBay for way too much money. I thought I was going to get rich. Turns out, I was just an idiot.
And you know what's even more frustrating? All these other analysts are jumping on the bandwagon, raising their price targets and maintaining "Buy" ratings. It's like they're all afraid of missing out on the party, even if the punch is clearly poisoned.
So, What's the Real Story?
Palantir is a good company doing interesting things, but its stock is a dangerous game. Don't get caught up in the hype. Don't be a sheep. And for the love of God, don't buy into the stock split nonsense. It's fool's gold, plain and simple.