Investing can be hard -- even when you get things right.
Case in point: Shares of Palantir Technologies (PLTR 18.80%) have advanced more than 350% since the start of 2024. For investors who managed to catch lightning in a bottle, there's a tremendous temptation to take the money and run -- particularly when volatility enters the market.
Yet, by hanging tough and letting your winners run, investors can turn modest winners into truly life-changing sources of wealth. Indeed, there's still a case for new investors to hitch their wagon to Palantir. Here's why.
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What Palantir does and why it's so important
First, let's recap Palantir's business model and why it stands to change how organizations operate.
NASDAQ: PLTR
Key Data Points
In a nutshell, Palantir is one of the first companies to convert the potential of artificial intelligence (AI) platform technology into real-world results.
Consider this: Organizations are awash in data. Hidden within that data are competitive advantages of all kinds:
- Better ways to sell
- Improved customer relations
- Faster shipments
- Cheaper costs for materials and labor
In the past, it's been the job of countless human managers to do their best to sift through this data and then squeeze tiny efficiencies from it over months or years.
What Palantir offers is a new approach. By using AI to monitor, organize, and analyze an organization's data, Palantir's platform can see what no human can. What's more, organizations can implement processes based on real-time AI insights, which greatly enhances efficiency.
Granted, there's still a long way to go, but Palantir's rapid rise makes it clear: Organizations are eager to build out their AI capabilities to capture the competitive advantages hidden within their own systems and data.
Why Palantir still has years of growth ahead of it
The reality is that the AI investment cycle is just getting started. In the past quarter alone, companies announced more than $325 billion in AI investments -- and that's just for 2025. Apple announced more than $500 billion in planned AI spending over the next four years.
Granted, much of this planned spending will go to chipmakers like Nvidia, who produce the powerful (and expensive) GPUs that power AI applications. Nevertheless, a significant portion of AI spending will go toward software platforms, like Palantir's AIP.
Moreover, the true inflection point for AI software could arrive when small and medium-size businesses and organizations come on board. In particular, Palantir's platform could drive massive efficiencies across a range of industries traditionally dominated by small businesses, such as construction, real estate, and retail.
To sum up, Palantir stock has already delivered massive gains for investors who got in on the ground floor. Nevertheless, I don't think its run is over. In fact, the recent volatility in the stock market could offer an opportunity for savvy long-term investors to scoop up Palantir shares at a significant discount to where they traded only a few weeks ago. And in the years to come, that could prove to a very smart decision indeed.
