This One Hits 500% First! Palantir vs Nvidia

00:19:00
https://www.youtube.com/watch?v=0c6IbNPWyjo

概要

TLDRThe analysis compares Nvidia and Palantir as key players in the AI industry. Nvidia, with a strong foundation in GPUs and a robust software ecosystem (CUDA), is seen as the powerhouse behind AI hardware. Palantir, on the other hand, focuses on providing crucial software that integrates AI models into operational frameworks, particularly for enterprise users. Both companies have significant future growth potential, with Nvidia projected to command a higher market share and growth metrics but facing risks from competition. Palantir is rapidly accelerating its commercial strategy, showing strong year-over-year growth, but it also faces risks related to its scaling and high valuation.

収穫

  • 🚀 Nvidia is the engine of AI, providing essential GPU hardware.
  • 🧠 Palantir serves as the brain, offering software solutions for AI deployment.
  • 📈 Nvidia anticipates a 114% revenue increase for fiscal 25.
  • 🔍 Palantir's growth strategy is accelerating in the commercial sector.
  • ⚡ Nvidia's CUDA platform is a key competitive advantage.
  • 📊 Palantir achieved sustained profitability, showing its potential.
  • 🔗 Partnerships and collaborations are crucial for both companies' futures.
  • 💲 Stock growth estimates suggest promising returns for both in the long term.
  • 📉 Nvidia faces risk from increasing competition in the AI hardware market.
  • 🤔 Palantir's boot camp model could hinder its scaling efficiency.

タイムライン

  • 00:00:00 - 00:05:00

    The video discusses the rapid rise of artificial intelligence and its impact on businesses, focusing on two major players in the industry: Nvidia and Palantir Technologies. Nvidia is explored as the primary hardware provider, especially its GPUs, essential for training AI models, along with its software ecosystem including CUDA and NIM for enterprise applications. In contrast, Palantir is presented as the software layer that equips enterprises to effectively utilize AI on their data, with its Gotham, Foundry, and Apollo platforms supporting complex data integration and deployment.

  • 00:05:00 - 00:10:00

    Nvidia is characterized as having a dominant market presence with impressive growth and profitability metrics, including a forecasted revenue jump of 114% year-over-year. While facing potential margin compression amidst increasing competition, its pipeline for new technology and deep partnerships illustrate a strong growth trajectory. On the other hand, Palantir's recent shift to commercial crucial markets shows accelerated growth in its US business, driven by its AIP product, which promotes secure AI deployment in enterprises. Their financial stability is underscored by a positive cash flow and no debt, but concerns exist regarding their sales model and stock valuation.

  • 00:10:00 - 00:19:00

    In comparing the two companies, Nvidia offers immediate high growth and a robust competitive moat, while Palantir is poised for long-term acceleration despite significant challenges related to scaling and high valuations. The video concludes by estimating potential stock growth, favoring Nvidia in the short-term and Palantir as the better long-term investment, asserting both companies are strong contenders within the AI landscape.

マインドマップ

ビデオQ&A

  • What are Nvidia's strengths in the AI market?

    Nvidia excels in creating powerful hardware (GPUs) essential for building AI infrastructure, along with a strong software ecosystem like CUDA.

  • How does Palantir differ from Nvidia?

    Palantir focuses on providing the software layer for enterprises, supporting secure usage of AI models with its platforms like AIP, Foundry, and Apollo.

  • What are the recent financial trends for Nvidia?

    Nvidia is projecting a revenue of $130.5 billion for fiscal 25, marking a 114% year-over-year increase, mainly driven by its data center segment.

  • What challenges does Palantir face?

    Palantir's scaling difficulties stem from their boot camp sales model and high stock valuation pressures, alongside dependency on government contracts.

  • What is the estimated stock growth for Nvidia in the next 10 years?

    Nvidia is estimated to grow between 200% and 300% over the next 10 years.

  • What about Palantir's future stock potential?

    Palantir could see stock growth between 200% and 500% depending on its commercial business expansion.

  • How do the two companies compare in terms of market share?

    Nvidia holds over 80% market share in data center hardware, while Palantir has strong niche offerings but faces broader competition.

  • What's the primary risk for Nvidia?

    Nvidia's main risk comes from increasing competition in the GPU market and the potential for margin compression.

  • What's the projection for Palantir's U.S. commercial growth?

    Palantir projects at least 54% growth in its U.S. commercial business for fiscal 25.

  • What should investors consider when looking at Nvidia versus Palantir?

    Investors should weigh Nvidia's hardware dominance and established position against Palantir's emerging commercial growth and software capabilities.

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  • 00:00:00
    artificial intelligence. It's
  • 00:00:01
    everywhere. It exploded, reshaping
  • 00:00:04
    industries, promising utopia or maybe
  • 00:00:07
    even chaos, depends on who you ask. And
  • 00:00:09
    for the past 2 years, two companies have
  • 00:00:11
    been driving that explosion. Nvidia and
  • 00:00:14
    Palanteer. Their stocks, well, they went
  • 00:00:16
    vertical. They became synonymous with
  • 00:00:18
    the AI gold rush. But now, well, the
  • 00:00:20
    markets are getting a little shaky, and
  • 00:00:22
    Nvidia has consistently been taking hits
  • 00:00:24
    all year on its stock price. And you're
  • 00:00:26
    probably sitting there, I don't know,
  • 00:00:27
    maybe looking at your portfolio and
  • 00:00:29
    wondering, all right, which one of these
  • 00:00:31
    is the real deal? If I have to bet on
  • 00:00:33
    the future of AI, where do I put my
  • 00:00:35
    money today? Look, they both have
  • 00:00:37
    massive potential. That's undeniable,
  • 00:00:39
    but I'm going to dig deep, and I mean
  • 00:00:41
    deep, into these two companies. We're
  • 00:00:43
    going to try to figure out which one
  • 00:00:45
    makes the most sense in the market
  • 00:00:47
    today. And yeah, I know that that means
  • 00:00:49
    that half of you might disagree with me
  • 00:00:50
    by the end, but stick with me. We're
  • 00:00:52
    going to look at different timelines,
  • 00:00:54
    different risks, and different stock
  • 00:00:56
    estimates. I want to pull out all the
  • 00:00:57
    key information. Forget the noise. What
  • 00:01:00
    actually matters for understanding where
  • 00:01:02
    these two giants are going because the
  • 00:01:04
    contrast, that's what makes this
  • 00:01:05
    interesting. It's like we're looking at
  • 00:01:07
    two fundamental building blocks of this
  • 00:01:09
    AI revolution, personified by two
  • 00:01:12
    companies. Nvidia, it's the engine, raw
  • 00:01:15
    pure power. They make the insanely
  • 00:01:17
    powerful hardware, those GPUs that
  • 00:01:19
    everyone, and I mean everyone, needs to
  • 00:01:22
    build and train these massive AI models.
  • 00:01:24
    It's the foundational muscle. And then
  • 00:01:26
    there's Palanteer. They're positioning
  • 00:01:27
    themselves as the operating system for
  • 00:01:29
    AI, the software layer that lets
  • 00:01:31
    companies actually use all that NVIDIA
  • 00:01:34
    power, connect it to their own messy
  • 00:01:36
    data, and do it securely and
  • 00:01:38
    effectively. It's the brain telling the
  • 00:01:39
    muscle what to do. Let's break it down.
  • 00:01:42
    Engine versus operating system. Nvidia.
  • 00:01:45
    For years, we knew them for this, making
  • 00:01:47
    games look realistic. But their big
  • 00:01:49
    pivot, the move that really put them in
  • 00:01:51
    the heart of AI, it came from a kind of
  • 00:01:53
    brilliant accident. They realized that
  • 00:01:55
    the way their chips handle graphics,
  • 00:01:57
    tons of calculations all at once,
  • 00:01:58
    parallel processing, was perfect for
  • 00:02:01
    training AI. But here's the real secret
  • 00:02:03
    sauce. The thing competitors are
  • 00:02:05
    struggling with. CUDA, or compute
  • 00:02:07
    unified device architecture. It's their
  • 00:02:09
    own software platform launched nearly 20
  • 00:02:12
    years ago. It lets developers unlock the
  • 00:02:14
    GPU's power for stuff beyond graphics.
  • 00:02:17
    Millions of developers know it. There's
  • 00:02:18
    a whole universe of tools built around
  • 00:02:20
    it. That's not just hardware leadership.
  • 00:02:23
    That's a software moat deep and wide.
  • 00:02:26
    Because there are a ton of developers
  • 00:02:27
    trained on CUDA and are less likely to
  • 00:02:29
    switch to a competing platform and learn
  • 00:02:31
    a whole new programming environment. But
  • 00:02:33
    the moat doesn't stop with CUDA. They
  • 00:02:35
    also have NIM or NVIDIA inference
  • 00:02:37
    microservices where NIMS are pre-built
  • 00:02:40
    optimized software containers that allow
  • 00:02:42
    enterprises to easily deploy AI models
  • 00:02:44
    from NVIDIA partners or even
  • 00:02:46
    open-sourced on NVIDIA hardware. NIMS
  • 00:02:48
    abstract away much of the complexity of
  • 00:02:50
    model optimization and deployment,
  • 00:02:52
    potentially accelerating enterprise AI
  • 00:02:54
    adoption. NIM agent blueprints provide
  • 00:02:57
    templates for building AI agents for
  • 00:02:59
    specific tasks like customer service or
  • 00:03:01
    data extraction. This layer aims to
  • 00:03:03
    capture value beyond the chip sale
  • 00:03:05
    itself. They're also creating Omniverse,
  • 00:03:07
    which is a platform focused on creating
  • 00:03:09
    and operating virtual worlds,
  • 00:03:11
    simulations, and digital twins,
  • 00:03:13
    targeting the industrial digitalization
  • 00:03:15
    market. It leverages NVIDIA's strengths
  • 00:03:17
    in graphics and simulation, and is
  • 00:03:19
    offered via subscription for enterprise
  • 00:03:21
    use. Then there's NVIDIA AI Enterprise,
  • 00:03:23
    which is positioned as an operating
  • 00:03:25
    system for enterprise AI. The software
  • 00:03:27
    suite bundles tools, frameworks, and
  • 00:03:29
    support to streamline the development
  • 00:03:31
    and deployment of production-grade AI
  • 00:03:33
    applications. My point is that they're
  • 00:03:35
    not slowing down at all. Granted, there
  • 00:03:37
    is that whole $55 billion loss from not
  • 00:03:39
    shipping their H2O chips to China, but
  • 00:03:41
    the momentum is still there. They're
  • 00:03:43
    building the whole ecosystem, their own
  • 00:03:46
    processors, super fast networking to
  • 00:03:48
    connect everything, layers of AI
  • 00:03:50
    software, and they want to sell
  • 00:03:52
    companies the entire high performance AI
  • 00:03:54
    factory from top to bottom. Nvidia's
  • 00:03:57
    recent financial performance has been
  • 00:03:58
    stellar to say the least. For fiscal 25,
  • 00:04:01
    they guided towards revenue around 130.5
  • 00:04:04
    billion, which is a staggering 114%
  • 00:04:07
    increase year-over-year. The engine
  • 00:04:09
    behind this is the data center segment,
  • 00:04:11
    which grew even faster at 142%. To me,
  • 00:04:14
    this signals a fundamental widespread
  • 00:04:16
    reliance on their hardware for building
  • 00:04:18
    AI infrastructure. Profitability is
  • 00:04:20
    equally incredible. GAP gross margins
  • 00:04:22
    hovered around 75%. This level of
  • 00:04:25
    margins essentially have peaked and may
  • 00:04:27
    not be sustainable which we're going to
  • 00:04:28
    see in Q1 of 26 with a gap gross margin
  • 00:04:31
    of around 70%. This potential moderation
  • 00:04:34
    reflects the natural economic pressures
  • 00:04:36
    that come from dominant players. You
  • 00:04:38
    have increasing competition, evolving
  • 00:04:40
    product mix, and the sheer difficulty of
  • 00:04:42
    sustaining these historically high
  • 00:04:44
    margin levels indefinitely. While we
  • 00:04:46
    might see slight margin moderation as
  • 00:04:48
    competition increases, the current
  • 00:04:50
    financial picture is one of dominant
  • 00:04:52
    scale and profitability in both the
  • 00:04:54
    short and the long term. So, where does
  • 00:04:56
    the growth keep coming from? Well, more
  • 00:04:58
    data centers for sure, and some big
  • 00:05:00
    companies are scaling back data center
  • 00:05:02
    expansion until the dust settles on the
  • 00:05:05
    tariff yo-yo situation that we've been
  • 00:05:07
    dealing with. But overall, the primary
  • 00:05:09
    growth driver continues to be the data
  • 00:05:11
    center market. Fueled by generative AI
  • 00:05:13
    training and inference, cloud provider
  • 00:05:15
    buildouts, and emerging sovereign AI
  • 00:05:18
    initiatives by nations worldwide. They
  • 00:05:20
    are deepening partnerships with all
  • 00:05:21
    major cloud providers to integrate their
  • 00:05:23
    latest chips like the Blackwell
  • 00:05:25
    platform. Looking ahead, the road map
  • 00:05:27
    includes the Vera Rubin architecture
  • 00:05:29
    slated for 26, promising another
  • 00:05:31
    significant performance jump,
  • 00:05:33
    potentially 3.3 times better than
  • 00:05:35
    Blackwell Ultra for inference. And then
  • 00:05:38
    there's the subsequent Feainman
  • 00:05:39
    architecture in 2028. Beyond GPUs,
  • 00:05:42
    Nvidia offers the Grace CPU superchip
  • 00:05:44
    for specific workloads and high
  • 00:05:46
    performance networking solutions. Think
  • 00:05:48
    Infiniban, Spectrumax Ethernet, and
  • 00:05:50
    VLink Interconnects. crucial for
  • 00:05:52
    building large-scale AI clusters,
  • 00:05:54
    reinforcing its full stack approach.
  • 00:05:57
    Their roadmap of new technology could
  • 00:05:59
    literally be a video in itself. Longer
  • 00:06:01
    term, Nvidia is strategically investing
  • 00:06:03
    in potentially huge markets of
  • 00:06:05
    automotive with their drive platform for
  • 00:06:07
    autonomous vehicles and robots with
  • 00:06:09
    their Jetson platform for edge AI.
  • 00:06:11
    Gaming remains a solid profitable
  • 00:06:13
    business, but it isn't the primary
  • 00:06:14
    hyperrowth driver anymore, seeing as how
  • 00:06:17
    gaming only made up 8% of last year's
  • 00:06:19
    revenue. Its future growth may lie in
  • 00:06:21
    cars, robots, and CUDA X tied to all
  • 00:06:24
    their hardware. Nvidia is placing wide
  • 00:06:26
    bets to keep its momentum. The engine is
  • 00:06:28
    firing on all cylinders. Powerful,
  • 00:06:30
    profitable, and it's expanding its
  • 00:06:32
    reach. Before diving in, I want to share
  • 00:06:34
    some info about today's sponsor, Liberty
  • 00:06:36
    Defense, where they are revolutionizing
  • 00:06:38
    security with AI powered next-gen
  • 00:06:40
    detection solutions for concealed
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    metallic and non- metallic threats.
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    Their flagship Hexwave technology offers
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    seamless and touchless screening without
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    the need to remove personal items,
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    making security faster and more
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    efficient at airports, stadiums, and
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    even schools. Liberty Defense has
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    secured an exclusive license for its
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    core technology from MIT, and has
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    invested over $50 million in R&D.
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    They've achieved significant milestones,
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    including deployments at major airports
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    like Toronto, Pearson, Manchester, and
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    Rochester, and have been awarded over 5
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    million in contracts from the TSA for
  • 00:07:13
    advanced imaging upgrades to the
  • 00:07:15
    existing body scanners. and their
  • 00:07:17
    president Brian Cunningham is also an
  • 00:07:18
    adviser and senior counsel to Palanteer
  • 00:07:21
    with a projected revenue of $20 million
  • 00:07:23
    in 2025 and 57 million in 2026 and
  • 00:07:27
    strong market drivers like the TSA
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    mandate for 100% aviation worker
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    screening. Liberty Defense is poised for
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    significant growth and they're committed
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    to creating safer environments and
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    providing peace of mind through superior
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    security technology. To learn more,
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    check out the link down in the
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    description.
  • 00:07:43
    [Music]
  • 00:07:48
    Now, Palunteer, a totally different
  • 00:07:51
    story. They started in the shadows,
  • 00:07:53
    building complex data tools for
  • 00:07:54
    governments, defense, intelligence
  • 00:07:56
    agencies, places with huge, messy,
  • 00:07:59
    secret data. Their Gotham platform
  • 00:08:01
    became legendary in those circles. For
  • 00:08:03
    years, Palanteer's financial narrative
  • 00:08:05
    was dominated by strong, albeit
  • 00:08:07
    sometimes lumpy, government revenue and
  • 00:08:10
    persistent gap losses due to high
  • 00:08:11
    operating costs and their stockbased
  • 00:08:13
    compensation. However, the past year has
  • 00:08:16
    marked a significant inflection point
  • 00:08:18
    characterized by its accelerating
  • 00:08:20
    overall growth, the achievement of
  • 00:08:21
    sustained gap profitability, and most
  • 00:08:24
    notably, its dramatic surge in its US
  • 00:08:27
    commercial business, which is what I had
  • 00:08:29
    been trying to convey in my early videos
  • 00:08:31
    on Palunteer 2 years ago. Their best
  • 00:08:33
    move was taking that government contract
  • 00:08:36
    know-how to the corporate world with
  • 00:08:38
    Foundry, helping big companies make
  • 00:08:39
    sense of their own data chaos. But the
  • 00:08:42
    gamecher, the reason we're talking about
  • 00:08:44
    them in the same breath as NVIDIA now is
  • 00:08:47
    AIP. AIP represents Palunteer's
  • 00:08:49
    strategic pivot to become the essential
  • 00:08:51
    software layer for enterprises looking
  • 00:08:53
    to deploy AI. It's designed not to build
  • 00:08:56
    the base AI models itself, but to
  • 00:08:58
    provide the secure infrastructure,
  • 00:09:00
    governance tools, and connectivity for
  • 00:09:02
    organizations to safely use various
  • 00:09:05
    large language models and other AI tools
  • 00:09:07
    on their own proprietary data integrated
  • 00:09:10
    directly into their operational
  • 00:09:11
    workflows. Boiling it down, this isn't
  • 00:09:14
    about selling the AI models like
  • 00:09:16
    ChatGpt. It's about creating the secure
  • 00:09:18
    environment for the companies to use
  • 00:09:20
    those models safely on their own within
  • 00:09:23
    their sensitive data plugged right into
  • 00:09:25
    how they actually work. Think of it as a
  • 00:09:27
    secure control room for enterprise AI.
  • 00:09:29
    And they found a clever way to sell it.
  • 00:09:32
    AIP boot camps, short intense workshops.
  • 00:09:35
    Potential customers come in, use AIP
  • 00:09:38
    with their data, and see results fast.
  • 00:09:41
    It literally slashed their sales cycle.
  • 00:09:43
    Suddenly, boom, traction. They now have
  • 00:09:46
    potential customers immediately
  • 00:09:48
    converting to a full-fledged customer.
  • 00:09:50
    But AIP is just one of four major
  • 00:09:52
    pillars for Palanteer. They began with
  • 00:09:54
    Gotham, as I'd mentioned earlier, which
  • 00:09:56
    was initially developed for the US
  • 00:09:57
    intelligence community and government
  • 00:09:59
    agencies. It excels at fusing diverse
  • 00:10:02
    data types, structured and unstructured,
  • 00:10:04
    from signals intelligence to human
  • 00:10:05
    reports, to identify hidden patterns,
  • 00:10:08
    connections, and threats. While
  • 00:10:09
    primarily a government tool, its
  • 00:10:11
    capabilities lay the groundwork for
  • 00:10:13
    Palanteer's broader ambitions. Foundry
  • 00:10:15
    is now used by all of Palanteer's
  • 00:10:17
    commercial customers and an increasing
  • 00:10:19
    number of government clients, often
  • 00:10:21
    serving as the backbone for AIP
  • 00:10:23
    deployments. And the last pillar is
  • 00:10:25
    Apollo, where it is now a commercial
  • 00:10:27
    offering that provides a single control
  • 00:10:29
    layer for continuous software delivery.
  • 00:10:31
    Think automated maintenance, security
  • 00:10:33
    updates, and configuration management.
  • 00:10:35
    Palanteer is hitting an inflection
  • 00:10:37
    point. While fiscal 2024 revenue at 2.87
  • 00:10:41
    billion, up 29% was solid. The key story
  • 00:10:44
    is the acceleration seen throughout the
  • 00:10:46
    year, especially in their high margin US
  • 00:10:49
    commercial business, which surged 64%
  • 00:10:51
    year-over-year in Q4. This clearly shows
  • 00:10:54
    that their strategy of expanding beyond
  • 00:10:56
    just government contracts and tapping
  • 00:10:58
    into the enterprise AI market via AIP is
  • 00:11:01
    gaining a lot of traction. Guidance for
  • 00:11:03
    fiscal 25 points to continued strength
  • 00:11:06
    projecting US commercial growth of at
  • 00:11:07
    least 54% achieving consistent gap
  • 00:11:10
    profitability suggesting a more
  • 00:11:12
    sustainable business model. Palanteer is
  • 00:11:14
    generating substantial cash. Q4 24 saw
  • 00:11:18
    460 million in cash from operations.
  • 00:11:21
    That's a 56% margin. Getting new
  • 00:11:23
    customers underscores the business
  • 00:11:25
    acceleration. Q4 saw a record 803
  • 00:11:28
    million in US commercial total contract
  • 00:11:30
    value closed, up 134% year-over-year.
  • 00:11:34
    This combination of strong growth and
  • 00:11:35
    high margins resulted in an impressive
  • 00:11:38
    rule of 40 score of 81% in Q4. On top of
  • 00:11:41
    all that, they also maintain a strong
  • 00:11:43
    balance sheet with over $4 billion in
  • 00:11:46
    cash and no traditional debt. The growth
  • 00:11:48
    here is a little less about sheer scale
  • 00:11:50
    like Nvidia, but it's more about rapid
  • 00:11:53
    acceleration in a key strategic market
  • 00:11:55
    segment. Now, I am going to drop a
  • 00:11:57
    speculation bomb on this video. Now, I
  • 00:12:00
    realize that I am reaching way out there
  • 00:12:01
    and I mean way out there. But I find it
  • 00:12:04
    intriguing that Palunteer recently
  • 00:12:06
    partnered with Archer Aviation and that
  • 00:12:08
    relationship is seeking to co-develop
  • 00:12:11
    nextgen software solutions for critical
  • 00:12:13
    aviation systems and EV tall route
  • 00:12:15
    planning and possible air traffic
  • 00:12:17
    control. And if you aren't aware, Archer
  • 00:12:19
    is an EV tall company looking to bring
  • 00:12:21
    an Uberlike experience to urban flights.
  • 00:12:24
    What if, and I realize it's a big if,
  • 00:12:27
    Palanteer uses this as a test bed for
  • 00:12:30
    something much bigger. What if this is
  • 00:12:32
    just an opportunity to upgrade the US
  • 00:12:34
    air traffic control systems with their
  • 00:12:36
    foundry capabilities to integrate
  • 00:12:39
    real-time data, think weather data,
  • 00:12:41
    flight plans, and airport operations
  • 00:12:43
    data, and use AIP to build an AI
  • 00:12:46
    assisted tool for controllers. Like I
  • 00:12:48
    said, I think this is just pure
  • 00:12:50
    speculation, but think about it for just
  • 00:12:52
    a moment. There is no other software
  • 00:12:54
    company with these capabilities that are
  • 00:12:57
    already this tight with the US
  • 00:12:58
    government contracts. And strangely
  • 00:13:00
    enough, I have a background in air
  • 00:13:02
    traffic control where I used to train
  • 00:13:04
    air crews in electronic warfare and
  • 00:13:05
    bombing runs. Now, let's move on to the
  • 00:13:08
    downside of Palanteer. Their sales model
  • 00:13:10
    and ability to scale are really holding
  • 00:13:13
    them back. I've mentioned this in a few
  • 00:13:15
    other videos that the boot camps are
  • 00:13:17
    probably having great conversion of
  • 00:13:19
    creating the sale, but it requires
  • 00:13:21
    companies to commit a resource to create
  • 00:13:23
    a use case for testing AIP and then they
  • 00:13:26
    have to go through a near week-long boot
  • 00:13:28
    camp just to test it out. It requires a
  • 00:13:31
    lot of commitment on the front end that
  • 00:13:33
    a lot of companies just aren't going to
  • 00:13:34
    take the time to do. And there's other
  • 00:13:36
    competitive companies that have a
  • 00:13:38
    traditional approach of just selling
  • 00:13:40
    capabilities without requiring a boot
  • 00:13:42
    camp. These competitors may have a lower
  • 00:13:44
    conversion rate, but they can scale
  • 00:13:46
    faster and they can get in front of a
  • 00:13:48
    lot more customers in a lot less time.
  • 00:13:50
    And in my opinion, this is going to hurt
  • 00:13:52
    Palanteer's ability to scale. Another
  • 00:13:54
    challenge for Palanteer is to justify
  • 00:13:56
    its stock valuation. Its forward price
  • 00:13:59
    to sales ratio is between 75 to 100x and
  • 00:14:03
    price to earnings have been well over
  • 00:14:05
    100x. And yes, the future potential is
  • 00:14:08
    there. But these high ratios, it demands
  • 00:14:11
    perfection from Palanteer, meaning they
  • 00:14:14
    can't have any slip ups in their revenue
  • 00:14:16
    or their margin guidance. It's a lot of
  • 00:14:18
    pressure for them to keep exceeding
  • 00:14:20
    analyst forecasts. And the last
  • 00:14:22
    challenge that I'll cover for Palanteer
  • 00:14:24
    is its reliance on government contracts.
  • 00:14:26
    Last year, the government segment
  • 00:14:28
    accounted for 55% of their revenue. And
  • 00:14:30
    as consistent and nice as government
  • 00:14:33
    contracts are, they are subject to
  • 00:14:35
    lumpiness, meaning that the contracts
  • 00:14:37
    are awarded infrequently and it doesn't
  • 00:14:39
    create a constant revenue stream. And
  • 00:14:42
    that's why I call it lumpy. So far, I've
  • 00:14:44
    covered both companies extensively to
  • 00:14:46
    provide a lot of context about what they
  • 00:14:48
    do best, where they have some exposed
  • 00:14:50
    weaknesses, and where they plan to go.
  • 00:14:52
    Let's break down a complete comparison.
  • 00:14:54
    When it comes to growth trajectory,
  • 00:14:56
    Nvidia is already at the top of their
  • 00:14:58
    game. At the 3-year, I see them as high
  • 00:15:00
    growth. The 5-year is more like medium
  • 00:15:03
    to high. And the 10-year, I only see it
  • 00:15:05
    as medium based on what we know today
  • 00:15:07
    and the potential slowdown in data
  • 00:15:09
    center growth. Now, on to Palunteer's
  • 00:15:11
    growth at 3 years, very high, continued
  • 00:15:14
    high at 5 years and then maybe slowing
  • 00:15:17
    to medium high at 10 years. Palunteer
  • 00:15:19
    will be accelerating for a very long
  • 00:15:21
    time and they are early in their growth
  • 00:15:23
    cycle. Next, let's look at the margin
  • 00:15:25
    profiles. Nvidia is very high today and
  • 00:15:28
    they're peaking in margin and have the
  • 00:15:30
    most risk of margin compression over
  • 00:15:32
    time. As for Palanteer, it is high and
  • 00:15:35
    improving. For Palanteer, they have a
  • 00:15:37
    lot of strong expansion and their main
  • 00:15:39
    pressure comes with the cost associated
  • 00:15:41
    with that expansion. So, I expect their
  • 00:15:43
    margins to continue improving over the
  • 00:15:45
    next 5 years. Next is a competitive moat
  • 00:15:48
    where Nvidia is very strong. They have
  • 00:15:50
    over 80% market share in their data
  • 00:15:52
    center hardware and their CUDA ecosystem
  • 00:15:55
    locks in their clients. Palanteer is
  • 00:15:57
    strong with its niche offering of
  • 00:15:58
    integrated platforms and ontology but
  • 00:16:01
    they face broad competition that may be
  • 00:16:03
    able to scale a little bit quicker than
  • 00:16:05
    them. The next section is key risks and
  • 00:16:07
    for Nvidia theirs happens to be
  • 00:16:09
    competition. Everyone is creating their
  • 00:16:11
    own GPUs these days including their
  • 00:16:14
    clients like Amazon, Microsoft and
  • 00:16:16
    Google. Plus they are peaking in their
  • 00:16:18
    margins. There's going to have to be
  • 00:16:20
    some compression and margins will come
  • 00:16:22
    down just to be competitive. And as for
  • 00:16:24
    Palanteer, they need perfect execution
  • 00:16:27
    because of their high valuation. They
  • 00:16:28
    can't afford to have any mistakes. And
  • 00:16:30
    then of course, their commercial
  • 00:16:31
    business model can't scale like their
  • 00:16:34
    competitors, and their government
  • 00:16:35
    dependency creates a little bit of
  • 00:16:37
    lumpiness for their revenue and their
  • 00:16:38
    margin. Now, on to my speculative
  • 00:16:40
    upside. Nvidia owns the physical AI
  • 00:16:43
    space with high upside across the board.
  • 00:16:45
    They also have a focus on automotive
  • 00:16:47
    robotics and their software ecosystem
  • 00:16:49
    where Palunteer has AIP ubiquity broad
  • 00:16:52
    OS enterprise adoption. And then there's
  • 00:16:54
    the speculation of future potential like
  • 00:16:57
    perhaps air traffic control. Seriously,
  • 00:16:59
    if it does happen, you better remember
  • 00:17:00
    it was me. And if not, well, you can
  • 00:17:02
    just call me crazy. So, how does all of
  • 00:17:04
    this boil down with regards to estimated
  • 00:17:07
    stock growth? My disclaimer is that I'm
  • 00:17:09
    using very broad brush strokes based on
  • 00:17:11
    the information that's available today,
  • 00:17:13
    but please feel free to give your point
  • 00:17:15
    of view down in the comments. Let's
  • 00:17:16
    start with the estimated stock growth at
  • 00:17:18
    3 years. I have Nvidia being more tight
  • 00:17:21
    with its potential of being positive 60
  • 00:17:23
    to 90%. And if the restrictions on
  • 00:17:26
    selling to China are lifted, that could
  • 00:17:28
    easily become so much higher. And for
  • 00:17:31
    Palanteer, well, it has a little bit
  • 00:17:33
    more variability in the short term. So,
  • 00:17:35
    I have them anywhere between 40 to 100%
  • 00:17:38
    in 3 years because of the high- risk,
  • 00:17:40
    highreward and the lumpiness in the
  • 00:17:41
    government contracts. And at the 5-year
  • 00:17:44
    mark, Nvidia is still a bit tighter
  • 00:17:46
    between 100 to 185%. And Palanteer is
  • 00:17:50
    still a little loose, but more upside
  • 00:17:51
    potential between 60 to
  • 00:17:53
    250%. Because it hangs solely on their
  • 00:17:56
    commercial business. And at the 10-year
  • 00:17:58
    mark, I have Nvidia at between 200 and
  • 00:18:00
    300% growth. And it could easily be a
  • 00:18:03
    lot more than that, but they have the
  • 00:18:05
    most to lose with competition since they
  • 00:18:07
    are so high on a pedestal. And as for
  • 00:18:09
    Palanteer, I see them with between 200
  • 00:18:11
    and 500% growth based on how they've
  • 00:18:14
    been performing and accelerating. But of
  • 00:18:16
    course, if they make strides in scaling
  • 00:18:17
    up their commercial business and land
  • 00:18:19
    some lofty government contracts on the
  • 00:18:21
    side, they can blow this estimate way
  • 00:18:23
    out of the water. In the short term, I
  • 00:18:25
    see Nvidia as a saver play with all the
  • 00:18:27
    hits that they've already taken on the
  • 00:18:29
    stock price. Now, in the medium-term,
  • 00:18:31
    they are both great options and nearly
  • 00:18:34
    tied, but I'd give a little bit more of
  • 00:18:36
    a nod to Nvidia as more of a sure thing.
  • 00:18:39
    And on the long term, I see Palanteer as
  • 00:18:42
    the best option between the two. But
  • 00:18:44
    don't ignore the fact that both are
  • 00:18:47
    great companies to invest in, and
  • 00:18:49
    they'll continue to do very well for the
  • 00:18:51
    next decade. That was my best attempt at
  • 00:18:53
    breaking down these two companies in a
  • 00:18:54
    deep dive, and I certainly hope that you
  • 00:18:56
    learned a little something new. As
  • 00:18:58
    always, thanks for watching.
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