While Palantir stock is on our watch list, with a 200+ current multiple, we're in no hurry to rush in before their August 5th report!

 

Palantir's stock is trading at a high multiple, over 200 times its earnings, primarily due to several key factors driving investor optimism and market dynamics.

1. AI and Technology Hype: The ongoing excitement around artificial intelligence and its applications has significantly boosted Palantir's valuation. The company has been at the forefront of integrating AI into its platforms, which has captivated investors looking to capitalize on the AI boom​ (Nasdaq)​.

2. Strong Financial Performance: Palantir has shown consistent financial growth, particularly in its government and commercial segments. In recent quarters, the company has reported impressive revenue increases and profitability. For instance, its Q1 2024 revenue rose 21% year-over-year, with substantial growth in its U.S. commercial business​ (Nasdaq)​​ (MarketBeat)​.

3. Strategic Contracts and Partnerships: Palantir's ability to secure significant contracts, such as a $178.4 million deal with the U.S. Army, underscores its robust position in the defense and intelligence sectors. Such contracts not only provide immediate revenue but also enhance the company's long-term growth prospects​ (Nasdaq)​.

4. Market Sentiment and Speculation: The broader market sentiment towards tech and AI stocks has been highly favorable, often leading to elevated valuations. This speculative enthusiasm has contributed to Palantir's high trading multiple, despite some analysts expressing concerns over its sustainability and long-term valuation​ (MarketBeat)​.

While these factors have driven the stock's high valuation, it's important to note that such elevated multiples can also introduce higher volatility and risk, especially if the company's growth does not meet market expectations in the future.

Palantir's upcoming Q2 2024 earnings report, scheduled for August 5th, is highly anticipated by investors and analysts alike. Expectations are centered around several key areas:

1. Earnings and Revenue: Analysts predict an average earnings per share (EPS) of $0.04 and revenue of approximately $652.47 million for the quarter. For the full fiscal year 2024, the projected EPS is $0.16, indicating a significant year-over-year growth​ (MarketBeat)​​ (TradingView)​.

2. AI and Commercial Growth: Palantir's AI initiatives, particularly its Artificial Intelligence Platform (AIP), have driven substantial growth in the commercial sector. The company's U.S. commercial revenue surged 40% year-over-year in Q1 2024, and its customer base increased by 69%​ (InvestorPlace)​​ (Finbold)​. The continued adoption and success of these AI tools will be closely watched.

3. Government Contracts: Palantir's robust portfolio of government contracts remains a strong revenue driver. Recent notable contracts include a $178 million project with the U.S. Army and a potential $480 million contract with the Department of Defense's Chief Digital and Artificial Intelligence Office (CDAO)​ (Finbold)​​ (InvestorPlace)​.

4. Market Sentiment and Stock Performance: Palantir's stock has risen significantly in 2024, reflecting strong investor confidence in its growth potential. However, concerns over its high valuation and limited earnings visibility persist. Analysts hold mixed views, with some suggesting caution due to the high multiple at which the stock trades​ (TradingView)​​ (MarketBeat)​.

The Q2 earnings report will be crucial in determining Palantir's near-term trajectory. 

Investors are looking for signs of continued revenue growth, successful AI deployment, and strong performance in both government and commercial sectors. Positive results could propel the stock higher, while any shortfalls might lead to a decline, given the current lofty valuation.

Why we recently bought shares of Global Foundries Ltd!

AST SpaceMobile (ASTS) stock has surged approximately 800% in the past 100 days due to several significant developments and strategic agreements.

 

A key driver behind this massive increase is the company's partnership with AT&T. This agreement aims to create a space-based broadband network that will provide cellular connectivity directly to standard mobile phones, a groundbreaking achievement in the telecommunications sector. This collaboration has been in progress since 2018, but it was solidified recently with a definitive agreement extending through 2030​ (markets.businessinsider.com)​​ (AT&T Newsroom)​.

Several factors contributed to the stock's dramatic rise:

1. Successful Testing and Milestones: AST SpaceMobile has achieved several critical milestones, including the first voice, text, and video calls made via satellite using everyday smartphones. These accomplishments have demonstrated the feasibility and potential of their technology, boosting investor confidence​ (AT&T Newsroom)​.

2. Upcoming Satellite Launches: The company plans to launch its first five commercial satellites into low Earth orbit this summer. These satellites will enable the commercial service that has been anticipated and tested in previous phases​ (markets.businessinsider.com)​.

3. Increased Trading Volume: Following these announcements, there was a substantial increase in trading volume. For example, on the day the AT&T agreement was announced, trading volume exceeded 36 million shares, compared to an average of 3.2 million shares, reflecting heightened investor interest​ (markets.businessinsider.com)​​ (Barchart.com)​.

Long-Term Prospects: The long-term prospects for AST SpaceMobile appear promising but come with significant risks:

• Potential Market Leadership: If successful, AST SpaceMobile could become a leader in providing global cellular connectivity, addressing connectivity gaps in remote and underserved areas. This would position the company at the forefront of a potentially lucrative market​ (AT&T Newsroom)​.

• Strategic Partnerships: Continued collaborations with major telecommunications companies like AT&T enhance the company’s credibility and market reach, potentially leading to further commercial agreements and expansions​ (markets.businessinsider.com)​​ (AT&T Newsroom)​.

• High Risk: Despite the potential, AST SpaceMobile's business model involves substantial risks, including high capital expenditures, technological challenges, regulatory hurdles, and the need for further financing to scale operations. The success of their satellite launches and the ability to maintain and expand partnerships are critical for long-term sustainability​ (Barchart.com)​.

In summary, AST SpaceMobile's recent stock surge is driven by strategic partnerships, successful technological demonstrations, and upcoming satellite launches. While the company shows strong potential for growth and market disruption, it also faces significant risks that could impact its long-term success.

Conservative investors often seek out Dividends to support their Retire Fund investments. American and Canadian retirees like REIT's and especially Dividend payers!

Dividends are a great way to boost your RetireFund investments 

and REIT's often are in the mix of Dividend allstars.

Here are five American REITs that have strong dividend histories and are dividend all-stars:

1. Federal Realty Investment Trust (FRT):

   With at least 25 years of dividend hikes, FRT is a well-established REIT. It focuses on retail and mixed-use properties.

2. Universal Health Realty Income Trust (UHT): UHT also boasts over 25 years of consistent dividend increases. It primarily invests in healthcare and medical office buildings.

3. National Retail Properties (NNN): NNN has a long history of dividend growth. It specializes in single-tenant retail properties across the United States.

4. Realty Income (O): Known as the “Monthly Dividend Company,” Realty Income has consistently paid dividends for more than 50 years. It invests in retail and commercial properties.

5. Essex Property Trust (ESS): ESS focuses on multifamily residential properties and has maintained a strong dividend track record for over two decades1.

Always consult with a financial advisor if you’re unsure about specific investments

 

Here are five Canadian REITs that also pay solid dividends

1. Allied Properties REIT (AP-UN.TO): With a high dividend yield of 10.14%, Allied Properties focuses on urban office properties and has a market cap of approximately $2.17 billion.
2. CT REIT (CRT-UN.TO): This REIT is associated with Canadian Tire and offers a dividend yield of 7.7%. It has a market cap of around $503.30 million.
3. Dream Industrial Real Estate Investment Trust (DIR-UN.TO): Dream Industrial REIT primarily invests in industrial properties. Its dividend yield is 9.45%.
4. Choice Properties Real Estate Investment Trust (CHP-UN.TO): Choice Properties focuses on retail properties and has a dividend yield of 9.45%1.
5. Granite Real Estate Investment Trust (GRT-UN.TO): Granite REIT specializes in industrial and logistics properties. Its dividend yield stands at 7.7%.

Remember that investing involves risks, and it’s essential to conduct thorough research and consider your own financial goals before making any investment decisions.

 If you’re interested in a broader exposure to REITs, you can also explore REIT exchange-traded funds (ETFs) such as iShares S&P/TSX Capped REIT Index ETF (XRE.TO), BMO Equal Weight REITs Index ETF (ZRE.TO), and Vanguard FTSE Canadian Capped REIT Index ETF (VRE.TO). 

Happy investing!