Palantir could be the most overvalued company that ever existed
247wallst.com
247wallst.com
It had the king himself on the board. The company value represented a decent fraction of the national gdp at the time. All without actually never producing anything of actual value. It was just bribes and speculation all the way through. It's wild.
https://en.wikipedia.org/wiki/South_Sea_Company
Extra History did a more easily digestible series, which was how I learned about it in the first place. https://youtu.be/k1kndKWJKB8
The armorials of the South Sea Company, according to a grant of arms dated 31 October 1711, were: Azure, a globe whereon are represented the Straits of Magellan and Cape Horn all proper and in sinister chief point two herrings haurient in saltire argent crowned or, in a canton the united arms of Great Britain. Crest: A ship of three masts in full sail. Supporters, dexter: The emblematic figure of Britannia, with the shield, lance etc all proper; sinister: A fisherman completely clothed, with cap boots fishing net etc and in his hand a string of fish, all proper.[61]
The artifact you link shows a map of the Americas in which California is an island and either Tierra Del Fuego is huge or the bottom of Argentina is an island and the northwest of the continent trails off into nothing, and Florida is sort of a stubby nub (other maps from this period show a more accurate Florida, so this might be a small-size-of-the-object problem).
They had a decent view onto the east coast of the Americas, but after that things got quite inaccurate. It's like... I don't know what anyone's expectations are, but it certainly isn't the perfect world map that's shown in the main image of Wikipedia's article.
The company's market-cap was almost 3 times national GDP
It's dubious because whereas a year's worth of GDP has some claim to actually being the value of something (with many caveats but it's engineered to behave like that as much as possible), market cap isn't. It's the amount all the shares would cost if someone bought them all in one go for the price some shares were most recently purchased for, which would never happen.
Market cap being rediculous is the hallmark of a bubble.
Value is subjective. Stock prices measure peoples perception of the value. Your thesis that it is incorrect can only come from 2 places (I think)
1. Dumb money - the market cant see that XYZ is overvalued or undervalued. My rebutal there is nonetheless XYZ has been valued by a conpletely open continuous auction that people are not restricted to participate in.
2. The parts are less than their sum. This may be somewhat true... total control over a company may be more (or less) valuable than splitting. But I dont think it is order of magnitude. And if it is, it is because the value to you isnt the value to me (the value of RAM to a gamer < value of RAM to OpenAI).
And the fact that in the entire BSSTC shareholder universe, there wasn't any noticeable volume for a sell, or a registered sell limit, at a lower value leading up to the last peak.
That must have been a rough trade, but someone got something out at the last moment.
1. No, we don't have proof that there was one person who thought it was worth 3x GDP. We have proof that there was one person who thought a 0.001% share of the company was worth 0.003% of GDP or whatever. They could think it was worth that much for plenty of reasons; maybe they thought the share price would grow for a bit more before collapsing so that they could make some profit, maybe they invested in order to just be an investor and have a say in investor meetings or however things worked back then. Maybe it was a status thing.
2. Why are we using the opinion of one random person to determine the value of a company
Please don’t invent strawman positions and reflect them on me. I said nothing of the kind.
Of course the company’s worth wasn’t what is implied by the peak trade.
But that price wasn’t set just by the peak buyer. Out of all the other shareholders and shares, nobody was offering a sale on that venue at a lower price.
Outside of all the idiosyncratic psychology of each individual, in aggregate, the market did “think” it wasn’t worth selling leading up to that point.
Then confidence began breaking.
Mania is mania. Bubbles are bubbles. They are not rational, but they are real, not the result of one person or two. Not the result of one peak trade.
Large groups of people start thinking something can’t come down. For a moment in time, a lot of people thought it wouldn’t (at least “yet”).
How far mania goes is what peak price reveals. That price is still a measure of the whole market at that moment.
A coin will release 1/1000000000th of it's eventual supply, have some trades at 10c and then claim the value of the entire supply as the headline value.
It's obviously dumb.
- Michael Kalecki
A better comparison is to compare somebody's net value to the total housing value of a city. For instance comparing Musk's net value to the total value of all the houses/apartments in New York. Or the the value of the gold in Fort Knox.
Palantir is a tech platform that consumes data from their clients in return for providing high level data-driven insights. They assign FDEs (or consultants) to really learn the details of a customers data. Foundry allows them to get single pane view of the data in an org and they actually have both the tech and engineering skills to do the dirty data cleaning jobs.
For an extravagant fee, you give them your data, they clean it for you, and then those same FDEs can tell you interesting things that you should have known, had you actually done proper data architecture in the first place.
Does it add value, yes. Is the value worth the fee? Like snowflake, they throw some very very good parties.
The thesis is "The current US administration is making enormous profits from their powerful positions. Whether of not I agree with this, I want some of that money too".
I'm not sure why this isn't mentioned because it's the number one factor driving the price.
https://bsky.app/profile/ronfilipkowski.bsky.social/post/3m7...
It seems like the financial outlet made a maths error and then was amazed by the absurdity of the incorrect result they got.
Specifically their whole outrage is based on having accidentally calculated what would need to happen for Palantir's revenues to grow 1500x as opposed to 15x. The corrected statistic would be the Palantir requires 11.4% revenue growth year over year not 35%.
And to be honest car manufacturers have always had very deep links with politics.
TSLA is over 300. And sales of EVs are actually falling under Trump. And tariffs are not helping.
Nothing about the valuation of TSLA or PLTR make any sense.
For example:
https://electrek.co/2025/07/23/elon-musk-with-straight-face-...
https://fortune.com/2025/01/30/tesla-profits-bitcoin-crypto-...
Oh yeah, and government subsidies (making up 38% of profits in 2024)
https://news.sky.com/story/elons-playing-a-very-dangerous-ga...
I lumped government subsidies in with EV sales since they are related. Trump wiped these out.
Robotaxi and robots are the fantasy category. They are not currently income producers and may not be for years to come. His robot demos have been widely panned as fake.
Meanwhile the story of Jensen and Musk continued onward with custom chips to support FSDv1, in which J's personal delivery of the DGX1 to OpenAI served as the catalyst to the relationship, iirc.
Nvidia got extremely lucky again and again and again, and what specifically did it is that right in time non-Nvidia researchers learned to train on smaller floating point bit lengths, which Nvidia raced to support. And great, well, done! A list of ironies though ... for example it's Google Deepmind that made the Turing generation of cards viable for nvidia. However, the new floating point formats train has arrived at it's last station, the NXFP4 station. There is no FP3 and no FP2 to go to. Is there a new train to get on? I'm not aware of one.
Nvidia's argument is "Blackwell easily doubles Ada performance!" ... but that is deceptive. The actual improvement is that Blackwell NXFP4 (4-bits) is more than double Ada FP8 (8-bit) performance in ops. That's the train that's arrived at its last station. Go back further and the same is true, just with larger and larger FP formats, starting at FP32 (single precision). Aside from a small FP64 detour, and a few "oopses" in some of the format they chose turning out useless or unstable, all quickly abandoned that's the story of nvidia in ML.
Comparing, for example, FP32 you don't see big improvements: e.g. 4090: 83 FP32 TFLOPS, 5090: 104 FP32 TFLOPS. Given the power requirements involved that's actually a regression. If you're stuck at 8 bits, nvidia's story breaks down and Ada cards beat Blackwell cards in performance per watt: 4090: 5.44 Watt/FP32 TFLOP, 5090: 5.5 Watt/FP32 TFLOP. Or, FP8, same story: 4090 is 0.681 Watt/FP8 TFLOP, 5090 is 0.686 Watt/FP8 TFLOP. Now effectively the new memory still buys some improvement but not much.
Will the next generation after Blackwell, with the same floating format as the previous generation be a 10% improvement and subject to further diminishing returns and stuck there until ... well, until we find something better than silicon? I should point out 10% is generous, because for FP8, Blackwell is actually not an improvement at all over Ada, on a per-watt basis for equivalent floating point lengths.
Plus Blackwell is ahead of the competition ... but only 1 generation. If nvidia doesn't get on a new train, the next generation of AMD cards will match the current nvidia generation. Then the next TPU generation will match nvidia.
How’s that Full Self Driving coming along? Does it still disable itself right before a crash so the driver has liability?
What 4/5yr term govt can turn off or replace their OS?
Right now 73% or their sales are to the US, and the next biggest source of revenue is the UK, far behind at 10%. The whole of the rest of the world, including the EU, adds up to 17%.
And the US has a pretty bad neo colonialism and CIA rep. If I was the president of Mexico I would not trust anything from up North right now.
A lot of the biggest potential markets are in Asia, and almost all Asia countries fear China, and to many of them it is their main potential military threat.
IMO the best interests of either of the two countries of which i am a citizen would be to be less dependant on the US, however the US is nothing like the threat China presents.
Edit: to add, they are competing with whatever equivalent product China has to sell anyway.
What other people say is their secret sauce, is they do consulting work for the government (a forward deployed engineer is just a consultant) and they make incredible margins because their senior management and early investors have connections to the government which gets them exclusive access to incredibly juicy contracts. As these contracts paid off they leant heavily into the social media meme stock trend so their CEO spends time talking like a psychopath and doing various non-economic things like spending huge amounts of money running adverts about how they're going to use AI to unleash Americas workers (America's workers aren't able to buy Palantir software or services, but they can buy it's stock).
I was kind of expecting someone to say it had EG really sophisticated ETL tools that can normalise loads of different data or can query across disparate data sources or something.
'But they cleaned the data up'. That data was also cleaned up during all the last major system updates. And during the implementation of those systems. And the implementation of the systems before that.
Also for the IDF
It's kind of a conspiracy theory bingo at that point, it's probably somehow even worse than we can imagine
He's ahead of Buffett but WB has massive AUM and MB should be running circles around him.
So yeah... he had one movie worthy trade, but that doesn't make it a sound strategy.
That's actually a pretty reasonnable ask for a tech company, if you believe Palantir can grow to the level of FAANG.
15^(1/35) = 1.11
1500^(1/35) = 1.34
Did the author maybe put a few extra zeros in their calculator when figuring out the annual revenue growth which would equal 15x over a 25 year span?
So the question is still why Palantir and not X/Y/Z?
This is not really to fault them. I see the company as far more mature than Tesla. They've cultivated a brand that works well for them. This is also not intended to be a criticism of Palantir investors, there are many reasons to invest, and even if you subscribe to the above that is of course your right! Many people invest for ideological reasons, myself included, and that's fine.
It's fine if you don't mind losing your shirt.
For us normal people, we invest to try and grow the money we've saved for the future (in my case, for my retirement), so investing in a company whose stock is insanely overvalued is a great way to blow up my pension pot.
I don't understand the rationale behind "investing for ideological reasons", can you explain it?
Can’t people just retweet Karp on X if they want to “support Palantir ideologically”?
This is GME all over again.
GME is not the same thing: while I think there are some true believers in the company itself (and this is part of what drove the initial interest in it), for the most part interest in modern meme stocks is driven by the polar opposite: a kind of financial nihilism that believes hype and gambling on popularity is the only thing left in the public stock market, and they're basically just trying to ride the wave of a crowdsourced pump-and-dump and fleece others via selling to greater fools (and/or creating a cult around a mythical short-squeeze that is reaching ever more fanciful heights).
Just another day of the stock market being irrational though, I guess!
Sure, but I'm under the assumption that many people, yourself included, are conflating "buying some company stocks" with "investing".
To first order approximation, it does not benefit a company that you trade stocks on the market once they have been emitted, any more than it benefits GM if you opt to buy a second hand chevrolet.
So the support is symbolic only.
Ridiculous statement. If you're actually investing your money in a company then you need to run the numbers, it's the most basic kind of due diligence you should do.
That puts them in a precarious situation when the political winds change
I thought Alex Karp in a relatively recent interview said he didn't give a hoot?