☕️ Palantir will be a trillion $ company within the next 3-5 years

Howdy! 👋 

We began the day with all three indices – the Dow, the S&P 500 and the Nazzy — in the green during premarket trading, but that very quickly gave way to a split with both the Dow and the S&P 500 having turned red as I write. 

My guess is that any dip won’t likely last for long. 

What makes me say so? 

As you may know, I’ve been increasingly vocal about the fact that I think there’s a short-term fight brewing between the go-fast gang and long-term investors. 

This kind of see-sawing is consistent with that because it means there is a ginormous battle for positioning — long or short — behind the scenes. 

Keep in mind two things. 

First, the short-term crowd almost inevitably loses money longer term but that doesn’t stop many from pounding their chests whenever there’s a blip and insisting, they’re “right.” 

And second, the world’s most successful investors focus on being profitable, even when they’re wrong. 

Why? 

The sooner you learn to stay focused on great companies putting up great numbers, the sooner your portfolio will thank you. 

According to FactSet: 

• Roughly 64% of S&P 500 companies have reported so far and of that bunch ~83% of S&P 500 companies have posted positive earnings surprises, while 79% have topped revenue estimates.  
• The blended growth rate now sits at 10.7% — which, if it holds, would mark the fourth straight quarter of double-digit earnings growth. And that, mind you, is UP from just 7.9% sell side analysts expected at the end of September. 

Once again, proof positive of something you hear me say frequently. 

Investing in optimism beats cowering in pessimism. 

Speaking of which…  

1 - Palantir will be a trillion-dollar company within the next 3-5 years 

I was honoured to be invited back for another conversation with the venerable Stuart Varney this morning ahead of today’s opening bell.  

Palantir and AMD are reporting this week, and he wanted my take on what’s next, if I’m buying and where do both companies go from here. 

Enjoy! (Watch) 

I will have some additional thoughts on Palantir for the One Bar Ahead® Family later this morning along with two very specific high probability trade ideas. 😄 

2 – If you’re worried about valuations, read this… and this… and this… 

There are loads of folks who are worried about stratospheric “valuations” right now. 

Particularly when it comes to Palantir. 

Fine. 

Just don’t conflate what’s probable with what’s possible. (Watch) 

There have been plenty of super high “value” companies that have made the investors who own ‘em millions. Perhaps even billions as they ebb and flow over time. 

Here are just a few, along with key Keithisms to help keep you on track: 

• Tesla – P/E >1,200 Was Just the Starting Line Tesla once traded at a P/E north of 1,200 — dismissed as insane overvaluation. Yet from its 2010 IPO to peak, it delivered ~17,000% returns (split-adjusted). High P/E isn’t a stop sign — it’s a launchpad when growth accelerates. 
• Amazon – P/E 3,700+ Was “Too Expensive”… Until It Wasn’t In the late ’90s, Amazon’s P/E soared past 3,700. Wall Street called it a bubble. Investors who ignored the noise and held through the dot-com crash? Over 150,000% gains since IPO. Visionary growth tends to outrun temporary metrics. 
• Nvidia – “$3T Monster” Started at P/E 400 Nvidia looked “insanely overvalued” at a P/E of ~400 pre-AI boom. Fast-forward: $4.5T+ market cap. Early believers turned skepticism into generational wealth. Dominant tech trends rewrite the rules regularly, so don’t apply outdated metrics and expect different results. 
• Netflix – P/E 500+? Streaming Was Just Warming Up Netflix traded at P/E ratios above 500 during its pivot to streaming. Critics said “no moat.” Result: 70,000%+ returns since 2002 IPO. Disruptive business models laugh at traditional P/E ceilings and often leave investors who get hung up by ‘em in the dust. 
• Apple – P/E 50+ After iPhone? “Overhyped” Became Iconic Post-2007 iPhone launch, Apple’s P/E climbed past 50. Many cashed out early. Long-term OBA thinkers? Over 200,000% gains from 1980 IPO. Ecosystem lock-in increasingly suggests that high P/E ratios are a sign of perpetual growth. 

Keith’s Investing Tip: It’s a harsh awakening for many but PE ratios have zero predictive value whatsoever – full stop - so don’t make the mistake of thinking they do and treating ‘em like a crystal ball. Instead, focus on refining your craft as an investor and/or a trader; there’s plenty of money to be made in both directions. The right tactics help tremendously. 

I’ll have some thoughts for the OBA Family later today, btw. 

3 – Microsoft’s just put the frontier in frontier investing 

First, Washington just greenlit Microsoft’s export licenses to ship Nvidia’s new GB300 GPUs — roughly 60,000 chips — to the United Arab Emirates. (Read) 

Microsoft is now the first U.S. company under the current administration to secure these kinds of export approvals. That means every major AI model — OpenAI, Anthropic, or otherwise — running in the UAE will effectively run through Microsoft’s pipes. 

My POV: Investors who still think software is all that are missing the forest for the trees. The more profitable path is owning the infrastructure that makes AI possible. 

You know what to do. 

And if you don’t and would like some help, I’ll be here. 

4 – Is Buffett’s cash pile the perfect “anti-indicator?” 

Berkshire Hathaway’s cash pile just hit a record $381.6 billion — that’s billion with a “B.” (Read) 

But not a dime in buybacks. 

Most believe that Unka B. is loading up for a shopping spree because that’s the palatable public story. Or at least some version of it. 

I think it reeks of paralysis. 

To be fair, I’ve long suspected Buffett’s hoarding cash to spare his successors the WWWD — “What Would Warren Do?” — syndrome once he’s gone. That way they can act without ghostly second-guessing. But this goes way beyond “dry powder.” 

There’s a fine line between being parked and being left behind — especially during one of the biggest technological transformations in human history. 

It wouldn’t be the first time. 

Berkshire has missed plenty of waves — from the rise of Apple (until very late) to AI, cloud, and clean tech. 

I used to think Berkshire would be fine post-Warren. 

Now I’m not so sure. 

KBW recently downgraded Berkshire, and I’ve got to say I am hard-pressed not to agree. 

Cash is comfort, not strategy. 

Trade Idea:  I’d rather own the innovators Berkshire won’t touch – think Palantir etc – than sit on a pile of “someday money” that never gets used. 

5 – OpenAI signs with AWS but the deal is really all about Nvidia 

OpenAI signed a $38 billion compute deal with Amazon Web Services, marking its first major partnership beyond Microsoft. (Read) 

Not surprisingly, AMZN is up big on the day. 

The deal is really about Nvidia. 

Let me put it this way. 

Hundreds of thousands of folks headed into the rugged California Sierras during the Gold Rush of 1849, but very few made anything at all. Those selling picks, shovels and whiskey, on the other hand, made bank. 

Keith’s Investing Tip: The world’s smartest most successful investors know to lock in supply before the next boom hits. 

Bottom Line 

There are two ways to play the game.  

Get in before the crowd = bigger returns  
Control risk ahead of time = less stress  
Build confidence = hold strong when others panic  

You got this – I promise. 

As always, let’s MAKE it a great day and start the week strong! 

Keith 😀