By coinnews 
00:00 Speaker A
Let’s talk more about Palantir’s quarterly results now. Let’s get to Third Bridge senior analyst Jordan Burger. Uh so Jordan, just give us sort of your first blush reaction here to these numbers.
00:13 Jordan Burger
Yeah, thanks for having me today. Well, it’s it’s really more of the same. We keep seeing beat after beat. We keep seeing very, very high growth rates, especially in the US commercial business. Um if we look at how US commercial did this quarter, it’s not really different in story from the last. Um if we look at more specifically what their story is here, US commercial has been taking them really past where they were with the government segment for a while. We continue to monitor that. As you mentioned, uh the valuation here, while we don’t take takes on that at Third Bridge, certainly this is what the story’s been about. And if you look at why it’s been the case, there’s really a couple things to think about. The AI market opportunity is big, there’s not a lot of pure play vendors that do this, and there’s not a lot that you can think might be able to do it consistently in the long term. Now, why has Palenteer been performing this way? Well, not only have they been able to execute as we’ve seen in this quarter and past quarters as well, but what we’ve really seen is their ability to execute has demonstrated what many might think is an ability to do so in a sustained manner. And in such a dynamic environment where we have so many startups, so much venture money funding changes in the market on a really monthly basis, there aren’t that many players you can say, well, they might actually be able to consistently execute over time. And we see that again this quarter.
03:00 Speaker A
And what do you think, Jordan, when you just step back and look at that sort of mega AI trade trend and theme, what is Palenteer doing different in your opinion? What’s their advantage?
03:26 Jordan Burger
Yeah, there there’s a couple of things here. So, you know, we we know they cut their teeth in the uh defense sector for a while. They’ve been doing this for decades at this point. Um and they started with really a services intensive business. In some ways, they were not fully just a software business. They’ve developed a certain level of AI know-how when it comes to actually selling AI. It’s a complicated process. It you have to identify a use case, you have to figure out how to monetize it, and then you have to put it into production in a customer environment. Initially, that required a lot of consulting know-how and they developed their product over a long time to be able to make that more efficient and execute on that better. And once generative AI, when we all saw that market boom a couple of years ago, they were able to pivot that tribal knowledge, if you will, into a new product, that being their AIP platform, and we continue to see them execute on selling that product. And that’s really the biggest differentiator that they’ve been able to do that, and instantiated within that is not just a great product, but it’s again, that tribal knowledge that they have.
05:33 Speaker A
Jordan, it’s interesting. I I was talking to CEO Alex Karp about this. Um I wanted his take on a recession. We’ve got plenty of smart economists, Jordan, come on the show and say they think the probabilities of a US economic downturn have increased. And I asked Karp about that, and he said, listen, bottom line, in his words, crushing it now, the more difficult the environment gets, he said, the more unit economics matter, and the more unit economics matter, the more you have to move to product-ized software and AI empowered software. That he says is our sweet spot. I’m just curious what you make of that answer.
06:40 Jordan Burger
Yeah, and that’s what they’ve been doing since before ChatGPT even really took the market by storm. They’ve been trying to scale down this product. And we you know, we we’ve talked about this before. They try to scale down a product that’s historically very difficult to sell. We’re talking, you know, over a year in sales cycles, 10, 15 forward deployed engineers, and you figure out how to turn that into an easy to sell product where you can quickly identify a new use case, bring on a new customer, and then scale from there. And that’s the name of the game for software, and they’ve been doing that clearly. That’s what the opportunity is for US commercial. And as we see 70% growth on very tough compares in the US commercial segment, um there’s really only one way to read that. They’ve been executing on their ability to deliver that more packaged software solution.
08:05 Speaker A
Jordan, thank you. Thanks for your perspective.
08:11 Jordan Burger
Thanks.