Jim Cramer Said Palantir Is a ” Must-Own” Stock. 3 Reasons He Is Absolutely Right

Jim Cramer is a popular television personality and a former hedge fund manager. He has made some interesting stock predictions in the past, and as an anchor on Squawk on the Street and host of Mad Money, he often discusses the impact of tariffs on the stock market and selects stocks that are worth a bet. 

According to Cramer, Palantir Technologies (Nasdaq: PLTR) is a “must-own” stock, and I couldn’t agree more. An AI, data analytics and software company, Palantir has soared 73% year-to-date. Cramer was full of praise for the CEO Alex Karp and stated, “The winners will become not winners. Except for Palantir because they own the media.”

I believe that Palantir is one AI stock that still has a lot of upside potential. Exchanging hands for $130, PLTR stock has soared over 400% in 12 months.  Yes, it is expensive but it is worth it. Here are three reasons I think Cramer is absolutely right. 

Key Points in This Article:

• Despite its elevated price-to-earnings multiple, PLTR can still be perceived as a value. 
• PLTR is the leader in a growing market, and its government contracts demonstrate how its pipeline of revenue is sustainable. 
• If you’re looking for a megatrend with massive potential, make sure to grab a complimentary copy of our “The Next NVIDIA” report. This report breaks down AI stocks with 10x potential and will give you a huge leg up on profiting from this massive sea change.

PLTR Is Strongly Positioned in a Growing Market 

Artificial intelligence (AI) spending is soaring and Palantir is one of the biggest players in the market. It is expected that the AI industry will reach $4.8 trillion by 2033 and Palantir is set to benefit from the same. The company sets itself apart with its products that are built around a framework that links digital information to real-world assets. It helps organize and display data which can be used for optimal decision making. 

A leader in developing AI software on its platform for the government and private companies, Palantir’s growth story is impressive. One of the biggest tech giants, Palantir works closely with government companies and has recently inked a deal with a nuclear company to develop an AI-driven nuclear operating system. This deal is worth $100 million. 

Considering its growth momentum in the government and commercial sector, Palantir is expected to keep winning. 

Impressive Financial Results

Palantir Technologies has impressed investors with strong fundamentals each quarter. In the first quarter, it saw a 39% jump in revenue to $884 million which is its seventh consecutive quarter of revenue increase. Its net income jumped 24% to $214 million and the customer count grew 39% year-over-year. The rise was led by strong sales growth across the U.S. commercial and government markets. 

Palantir saw 71% growth in U.S. commercial revenue and a 45% rise in government revenue. It booked the highest quarter of U.S. commercial total contract value of $810 million, up 183% year-over-year. The management has raised its full-year guidance and expects a 36% jump in revenue this year and expects the U.S. commercial revenue to grow by at least 68%. 

It Has a Strong Business Model

Palantir has what it takes to succeed in the highly competitive industry- an exceptional product. The company provides software through subscriptions and manages to generate recurring revenue. When businesses manage to generate steady recurring revenue, they tend to see higher profit margins and their income becomes more predictable.

In the first quarter, the company reported a net dollar retention rate of 124%, up from 120% in the fourth quarter of 2024. While this does not reflect the revenue from new customers, it shows that existing customers increased their spending on its products. 

Palantir has closed 139 deals worth $1 million and 31 deals worth $10 million in the quarter. The predictable revenue growth makes the stock worth betting on. 

Palantir is expensive but it will be worth your money. I believe the total addressable market for the company is a primary growth driver and the size of the market is significantly huge. Palantir could be one of the biggest winners of the AI race. 

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