While everyone’s focused on Nvidia as the most overvalued stock of this cycle, the real bubble is Palantir.

Palantir is sitting at a price to sales ratio of 100, making it the most expensive large cap stock ever on a revenue basis. At an almost $300 billion market cap with 34% revenue growth and less than $3B in sales for all of 2024, the stock’s valuation is completely disconnected from its fundamentals.

Here's a table of the most overvalued large cap stocks I could find throughout history, sorted by date of the peak P/S ratio along with P/E a year later and change in revenue, EPS, and share price in the year following the peak valuation (I worked all weekend on this unfortunately):

Nvidia

Nvidia’s valuation was insane and the growth was even crazier. That was a once in lifetime growth story, and PLTR is somehow priced much higher.

Tesla

Tesla’s 1,400 P/E in 2021 looks insane but EPS exploded the next year and the valuation normalized. Palantir doesn’t have anywhere close to that growth coming.

Cisco

Cisco is a better comparison. It crashed over 80% during the dotcom bubble pop and never returned to those levels. PLTR is more expensive with weaker growth and is somehow projected for less revenue growth than Cisco saw throughout that 80% stock decline.

Zoom

The closest comparison is Zoom, which peaked with a P/S of 106 in late 2020. Zoom went on to grow revenue at 170% and EPS at 319% over the next year. Despite that insane growth (much higher than what Palantir is projected to do), the stock still dropped 45% in that time, then bottomed nearly 90% from its highs. Palantir is trading at a similar valuation with significantly less growth. 2021 was also a euphoric market year, while we’re at the beginning of a market-wide bubble pop.

Palantir is more expensive than Zoom at its peak valuation (at the beginning of one of the most euphoric market periods we’ve ever seen) with much less projected growth. It is also trading far above Nvidia’s peak multiples despite Nvidia growing more than 6x faster on revenue and 4x faster on EPS.

Conspiracies

Palantir’s surge is driven by AI hype and retail euphoria. I saw bulls on Twitter calling for the stock to 10x in five years which is ridiculous. Some of the hype is also based on a weird conspiracy that Trump is going to pump it or Peter Thiel is going to enslave us all with AI. I have no idea where that comes from and I’m 99% sure that everyone blindly parroting these claims has no idea what Palantir actually does either.

Every stock in the table above showed strong revenue and earnings growth in the 12 months after their peak valuation. That didn’t stop the crashes. Valuations eventually matter. Palantir will keep growing but not anywhere near fast enough to justify this kind of multiple.

tl;dr: Palantir is talked about like the next Nvidia, but it’s the next Cisco or Zoom. I have no idea how this stock is above $20 a share.

Ha

In Serra Mesa. Murray Ridge Road.

Basically the title.

I just noticed a HUUUUGE uptick in white chocolate Cadbury’s eggs this year, couldn’t find a regular chocolate buttons egg anywhere.

Also things like the Half’n’half?! What was that.

Am I wrong?

Weird gelatinous substance on the paintbrushes as well

The outline is random tattoo flash--unfortunately couldn't find an artist attribution anywhere.

This is the first piece I've finished after giving up on two boring floral Amazon kits. I see a lot I could improve and I realized an hour in that it would look better with white thread on black fabric, but I love it anyway :)