All right. Hello everybody. Welcome back to another episode of Pounder Weekly. It has been a while since we've done Pounder Weekly. Uh Arie cannot make it today. I don't even know if Air is going to make it today. He said he would, but he lives across the world and he honestly might not be able to just given the time difference.

which kind of speaks to the first thing I want to talk about, which is uh and we I've said this publicly already and we we talked about it all publicly, but uh Palenteer weekly is likely not going to be weekly going forward uh for two reasons. Number one, it really is hard to get the schedules to line up and get everything to go weekly. Um that's just like the product of life and people have kids and you know, all this different stuff.

Number two is, and I'd be curious to get Matt's thoughts on this as well, is there's not as much to analyze on the company as much as there was four years ago. It crossed $200 a share today. So, we'll talk about that, but I think that in of itself is indicative of the fact that company's a bit more on autopilot and there are things to analyze, but not to the level that it was when it was six bucks, which means you might not need a weekly episode anymore. So, Matt, any thoughts in general about the company maturing and content creators maturing with the company as well?

No, I think uh I think you hit it on the head. I mean to be honest uh big shout out to Arie and and Amir because even though they would had to wake up at like the break of dawn, they didn't complain nearly as much as I would have complained. So, um, so they they they're they're real troopers in my eyes and they kept it kind of going and, um, it's been it's been a blast in retrospect to really cover the company literally from discrediting in misinformation, which I think is the main reason why we were doing Palunteer Weekly is like people just really didn't understand at all what uh what the heck was going on with the company uh to now really having a lot or I guess knowledge

and and now people can sit there and be like, "Okay, this person is literally just a hater or is probably a a paid political shill." Like they don't know anything that's going on. It's very easy to spot those people now. Whereas before there was so little information that I think people truly could grasp and hang their hat on that anybody could steer the ship in whatever way that they wanted. And so it was really relying on us to to really not us all alone of course and in tandem with the company putting out great information and Elellaniano and Chad and and all those guys putting out great information to to really help people along the way to understand the true potential.

And I think now people get it. And so I'm I'm with you like as as the company has gotten into its its uh new stage I feel like we don't have to give as much to the community. Uh, as much as people love for us to talk about it every week, it's there's so many great people that are covering it and we saw that when we were going into New York, you and me, we met up with a group of people and so many great people that have been covering it. Um, Amir, Arie, you know, you don't necessarily need a weekly episode. Just follow those guys and you'll get whatever information that you need.

>> Yeah, I agree. And uh, well, our brother from Sweden made it. Amir, what's up? >> Hey, Palanteer six monthly. Here we are. What's up, everyone? Man, you guys rush this episode. I I thought we used to do this like five past, so my bad. I'm here. Happy to see everyone. Uh, happen to hear most of what Matt said and I can only agree.

Um, yeah, Amir, we were just talking about how we're going to probably not even monthly, but this we will likely be back every earnings for for a episode with all of us, not weekly anymore. So, just your thoughts on the evolution of the need to do a weekly episode.

>> Yeah, you know, um, probably every viewer as well felt it for quite a while at Palanteer. really the the thesis has largely remained the same. The pace of uh how quickly Palanteer actually reached where we thought that they ultimately would be able to reach. I mean they probably blew past everyone's expectations including mine. But you know when when the thesis starts to play out it kind of feels sort of autopilot in a way. Of course, you have to keep track of the company, make sure that they're on on the right track, but

you know, doing a weekly episode for Palanteer, especially when they themselves didn't really feel the same need to prove themselves. You know, in historically, they would have all these uh frequent press releases. There was a lot to try to uncover, try to understand what each Palunteer product does. like uh there was a lot to dig into, but you know, as of late, I'm I'm sure um a lot of people felt the same way that well, we're kind of talking about the same things. Maybe the stock reached a new all-time high. It felt like like bi-weekly. Uh so, so we would talk about the stock price. We would, you know, give some comments about the valuation, but you know, there wasn't really much meat to to the bone, so to speak.

So, I I think it makes a lot of sense. I mean even you know the first idea was to you know okay well weekly might be a bit too much how about monthly but even on a monthly basis I mean it's still kind of the same thing so I think this makes a lot of sense that would make it like quarterly maybe if something big happens you you know we can do an episode to discuss that you know just do it you know play it by ear like when when there's something to talk about when there is value to provide when there's stuff to discuss as a community then it makes sense you know to um uh get together and talk about it, but just, you know, making the weekly episodes. There's simply not the same need for it. I mean, we all, you know, Amit covers, I'm sure, Palanteer like daily anyway on his show. I'm sure um Matt gives out comments frequently. I I do that as well, just like Matt was talking about before I joined in. So, to me, it it makes a lot of sense to do it this way.

>> Yeah. Yeah, even though I'll miss um talking to you guys so often, but >> you're not going to whis up making up. You're not going to miss waking up early, which you know, so it's like it makes sense. It was a big burden on you and Arie, but the fact that you showed up basically for the past year and a half, both of you, it's a testament to how much this journey has mattered. Um,

all right, folks. Let's get into it. Big day as we head into earnings. Palenteer $200 a share. I don't even know how to describe it. I mean, kind of felt like it just happened. Even a hundred just felt like it happened. Then a hundred got normalized. I mean, I guess we'll start with you, Matt. Like, what was your reaction when you saw this? And how are you thinking of a stock now that is uh $200 a share and reaching half a trillion in market cap?

>> I mean, it's um it's insane. I mean I when I first purchased it's kind of a milestone um for me because my bullcase when I was first kind of purchasing Palunteer back in September 2020 was like a $500 billion market cap at that point. Right now, obviously that target has moved, but initially it was like a a $500 billion market cap was like, oh, two, you know, 150, 250, maybe 500, right? It's going to take forever and uh it'll eventually get there, you know, by mid 2035 or something like that. It's going to have to prove itself and just it's just obviously took uh about a third of the amount of time that I was really expecting it to.

Um and you know partly I think is because the people see the true potential of it and you know institutions uh really see what what it can do for enterprise software but I think also it is in it continues to demonstrate itself to be a huge part of the economy and the backbone and I think it's only going to get even more so uh as as numbers get released and deals get released in 26 and 27. I mean, just the amount of political leaders that the company just continues to work with, it's insane. So, to me, it makes complete sense um that we're here and, you know, not not uh not that scary now that I know some of the things that have been going on and some of the deals. It just it's insane.

>> Amir, uh same question to you. And you know you have been someone who's really helped us understand valuation. You are someone who really understands Excel sheets, DCFs, etc. Uh I think all of us got humbled over the past year and a half because at some point all of us agreed, hey this thing is getting expensive and it well it continues to get expensive. the growth continues to go up. But if the stock continues to grow up and the growth continues to go up, you know, the multiple still expands versus comes down because at the end of the day, the the rate of growth of the market cap is so exponential compared to the rate of growth of the company that you know now it continues to trade above 100 times sales. How are you thinking of the market cap, the valuation, and have you kind of given up on this whole idea of saying, "Hey, maybe it's too expensive because they've proved the growth story to such an extent that you just believe they're going to keep growing into it."

>> You know, it is quite a humbling experience in a in a big way. And I I I don't think that many like everyone listening today, I don't think you will experience something like this like very often or perhaps even ever again in your investing lifetime. You know, it felt like it was yesterday that Palanteer was like $50 billion market cap. Now we are past half a trillion like well on our way to that one trillion.

Now when I say humbling experience is because the way intrinsic valuation works is that you need to revalue the business every time you're given a reason to Palunteer like each quarter that has been passing like the intrinsic valuation on my end has just like been exponentially increasing. I mean, prior to last quarter's earnings, my fair value was something like 75 and we were trading like at 130 um 140, you know, pushing 150. Q2 earnings come out come out and corp is like, yeah, we're going to 10x like US revenues like in five years. And you're like, damn, okay, what does that mean for, you know, intrinsic value? And my intrinsic value almost doubled to 135 just just in a quarter.

And even prior to that quarter, you know, 75, you know, as of Q1, it also like increased a lot like from the quarter prior. So each quarter that that passes, Palanteer just, you know, keeps proving everyone wrong. Like that my expectation, I'm sure a lot of people on Wall Street expectations are just simply too low. Uh like uh the company is executing at a way faster pace than you know anyone really expected. So it's it's it's quite humbling when you know each quarter that passes you like almost double the the valuation each quarter because you learn so much new you get new and higher expectations

and those expectations like if if we just rewind like two quarters people would have said that like yeah we're expecting a lot from this business because you know as you mentioned it's been expensive like all throughout you know for quite a while we we all felt like h probably expensive the P is up there the price to sales is up there. Fair value is probably, you know, way below where the stock code is. But the market humbled all of us. You know, the the market has actually probably been giving Palunteer, you know, letting it trade around, you know, what is actual fair value. It's just that we're all trailing it. You know, we we just don't see it yet.

So I think this quarter might be similar where you know um I raised my expectations from the company but I wouldn't be surprised if I'm still you know way too bearish and I would have to revise my fair value again. So as as I mentioned as of right now it is around 135 and that is like by a lot of growth you know given Karp's own quotes but yeah I mean this company is quite magical in that sense you like you never know like even um

like seeing uh you know I'm sure we we're going to get get into it but you know if you go back like a year ago people would would have told you yeah data bricks is going to eat Palanteer's lunch and like all of these things and then you're like no it's not actually a completely different different playing field actually these people all want to partner up with Palunteer and that is what what has happened now you know the data bricks partnership snowflake partnership another one that that was going to you know eat Palanteer's lunch if we go back to the early days like these aren't given like the same kind of companies so yeah

>> yeah I think it's a fair point I have like five simple reasons why I think the valuation has continued to expand the way it has. Number one, OpenAI is worth a trillion, not profitable. Foundation model company, potentially commodity. Uh, Pounder is seen as the actual use cases for AI in the real world. So, the street's like, hey, if OpenAI gets a trillion, then Pounder probably has to get something that's maybe not a trillion, but definitely

>> Where's the the trillion from? Is that like the expected IPO now? Because the race

>> Oh, yeah. Yeah, that's Sorry, that's what I meant to say. Yeah, that's what I meant to say. OpenAI is 500 billion but whenever they go public it will have to be at around that trillion dollar range. So I guess the streets kind of come like that but you know OpenAI was 350 billion when Palenter was 100 billion. So now Pounder is catching up to it but yeah I guess the expected value of OpenAI obviously is in the trillions and you would argue Palunteer is more valuable.

Number two is the option market. So, I know I was talking about this a couple months ago, but the amount of liquidity in options, Palunteer is a top 10 traded stock in the entire stock market globally every single day. We're talking about minimum of a million calls and puts traded. So, when you have that many people just trading the name in and of itself, there's going to be a floor to the stock because there's going to be a lot of people ready to buy the dip and then ready to sell or put puts and calls on it uh simultaneously. So from that perspective I think algorithmically the name has gotten such a big presence in the community for investors retail and institutional that has led to the sustained momentum.

Uh number three piggyback piggybacks off that if there is a dip now people want to buy right so if it falls from 200 to 180 like one could argue 180 is still really aggressive but people will buy just like when it fell from 180 to 142 when Citron said they were short and I don't know they haven't said anything in the past couple months now but uh when that dip happened people bought and people bought aggressively so I think now the name also has kind of that Tesla Nvidia type of attitude towards it where if you get a dip you have people that are just salivating for the opportunity to get exposure and that creates a floor to the price.

Fourth reason, they're growing faster than everybody, right? So, this is the only SAS company on the planet that has guided 50% growth for Q3 and 45% growth for 2026. No other SAS company, I think the fastest you have is like 32% by some of the cyber security names, but none of them are growing this fast. I mean, there's a world in which we could grow faster in Q3 than Nvidia grows faster. and you know it's a different scale but the point is in the age of AI if growth is what matters and counter can sustain it especially with their free cash flow margins um it will likely continue getting the the premium

and then finally Karp's meeting with people in Poland carps meeting with people in Ukraine I mean just internationally the level of his brand and the the rockstar that he has become the amount of inbound that Palanter is getting from world leaders governments institutions US commercial clients now international commercial clients that also adds the premium to the talk. People want to bet on a leader. Karp has an autobiography coming out in a week. I actually interviewed the author of the autobiography and that video will come out on my channel tomorrow. But like the fact that there are literally books being written about this guy, it's going to add a premium. And I think again the stock price at the end of the day of any company is how much someone is willing to pay for it. And if there's all these other reasons besides just the growth, which the growth is incredible, that adds to why people are willing to pay for it. That's why you've got the stock trading today.

Yeah, I mentioned it, you know, quite often on on these episodes, but I think like Palanteer is the ultimate momentum stock because it's been, you know, almost like a year and a half now where there's like no negative catalyst attached to the name. Like every single thing is just like super super positive for the company. Like every news that comes out like each earnings is is is better than than the last. all the news surrounding the company like this just like positive catalyst after positive catalyst like there there hasn't been anything like tying this company down which is why I believe like it was able to reach like all these new highs continuously like uh so I think that also plays a big um you know part part of how we were able to reach 200 so quickly I don't think anyone really expected Valentine to be at 200 by this point you know uh but yeah you all positive news all the time for like a year and a half, then yeah, you you reach these kind of pricing multiples, you know, after a while.

>> Look, the the thing with with multiples is that you know they don't really work for this kind of hyperrowth company and they've never done it uh you know historically either. So trying to rationalize like uh let me see currently Palanteer is trading at 665 times PE 150 times price to sales. Now those are you know looking at a trailing 12 months. Even if you look a year out with you know uh analyst expectations that have been proving you know too pessimistic historically it will still not make sense because the company's growing at 50% like

these multiples you know they um they grow just too quickly where like it doesn't really matter if the uh PE is 600 500 400 like these are all expensive like if if Palanteer was you know cut in half at 300 PE that will still be expensive. So you can't rationalize this kind of company by u the multiples. You can rationalize it you know uh by doing an evaluation where you look okay what is this company going to be doing for the you know next 10 years. Oh I mean what's our best guess as of right now and then you can start to make sense of it because you're looking at okay what are they going to do you know far out into the future and and you know you bring it back today.

So valuation wise you can try to you know see okay what is palunteer work but when you try to price it you know with the PE and and price of sales it will never make sense for this kind of company historically you you wouldn't be able to buy any of these you know uh super large you know to today's you know top 10 top five companies when when they were in in this phase because they all had expensive multiples may maybe not to to this degree but at the same time like which company was expected to grow you um continuously at 50% at this size, you know, while improving margin.

So, you know, you can make all these arguments for is the premium in the pricing justified or not. But even like if you cut the stock price in half, it still doesn't make sense. Like you would have to, you know, drop it by 80% to, you know, kind of make sense of it. And I think even the biggest bears would agree that yeah, Palunteer is probably worth more than if it was, you know, going to drop 80% to a place where the PE makes sense. You know, pricing will not make sense for a while in Palunteer. So, you know, hyperfocusing on it doesn't really make sense to me.

Now, if you tell me that you value the company and you looked at, okay, here are my expectations for the business, you know, for the growth, cash flow, and risk associated with that growth and cash flows. and then you tell me, "Yeah, I think it's worth this." And then you try to, you know, reason around it, then we can have an actual conversation. But if if your argument is just like, "Yeah, the P is too high." Well, like it won't make sense for this kind of company, not for a long while yet.

So, um, those kind of investors, you know, they will always exist where they, you know, try to make sense of the pricing and yeah, the the the the stock is is not for you. And that's not like living in bubble territory. It's just like the mechanics of the business in is in this stage. It will not make sense like ever for any company that's you know at this size growing you know at this space like the pricing will will never make sense for you and and it's fine like if you're not the kind of investor that's comfortable you know by looking at a high PE and not really beyond that then you know the stock is simply not not for you. Keep in mind like pricing is just near-term or like uh trailing 12 months like it won't capture the whole growth narrative of Palanteer. For that you need to value it and that's completely different. That's that's the way I view it. Anyway,

>> I think that's a really good point. I think the the most important thing you said right there is like if you were to cut the pounder PE in half and it goes from 600 to 300, that's a pretty expensive stock trading at three 300 times earnings. So it almost becomes like the numbers are irrelevant. And it's like it's not to say that to undermine the sophistication of looking at those multiples, but it's rather to say on a hyperrowth company and Tesla, Amazon, these are very clear examples of it. Uh the multiple always seems aggressive, but if the company actually is able to put up the growth, things change, narrative changes, and then obviously the companies can grow into those valuations. And over the life cycle of Palun's business, at some point it's going to become very mature. It's not going to be able to grow like it's growing today, but that doesn't mean that it's a bad company to buy in those early days of growing based on not being able to see what the future is going to entail. It also discounts all the innovation, all the R&D, all the new products Pounder might be able to come out with over the next decade that, you know, a lot of us don't even know about yet.

>> Yeah, agreed. All right, so let's get into earnings. Uh the company is guided for about 1.03 or 08 billion in revenue. I'll get the exact number. The street's expecting 1.09. So that would be about 50% growth. Uh, exactly 50% growth. And so I guess we'll start with there. Amir, I'll give it to you. Um, what do you think Palanteer is going to put up? What numbers are you the most concerned about? And now that the stock has made a run of about 20 bucks before the earnings, how are you thinking of the price going into?

Uh well, I think maybe like it kind of feels like uh you're kind of like uh softball balling it like me. Uh I I feel like I'm softballing but I I have them doing 112. So that's like 54.5ish and um like the split is uh 620 government 500 commercial but you know that is you know by expecting that net dollar retention is going to reach you know 130% which means that you know 30% of these 54 are like from existing customers. So like the whole scalability is still like playing a major part and gives you a lot of like kind of free growth in in in that sense.

So I have doing 112 54.5 kind of feels low lowballing it but uh that's still um you know where I'm at. Uh and we know historically Palanteer kind of um when when they give out their guidance they're like kind of guaranteed to beat it and quite often by quite a margin. So 115 maybe too low but that's where where I'm at. But that's still like really impressive 54.5 and that is as I mentioned off off the back of you know net retention of 130%.

Which also if they just retain their current operating margins which I actually expect them to you know improve that would mean a rule of 40 score surpassing 100 like for the for the first time. You know, we're all been like memeing about even Karp himself like, "Yeah, we should rename the rule of 40 to rule of 80, then rule of 90." I think they're going to actually surpass 100 this quarter. So, that's uh where I'm at with those, you know, major numbers.

But the one the one number that I'm really looking forward to is actually uh the customer count growth. I think this might be the first triple digit increase in uh existing customers. So if they can do more more than 100 added customers for this quarter then that's like the main number that I'm very very hyped about because we already know how they're able to scale their current customers you know with the especially now with you know AI um FD is coming out all of these new AI agents that they've been unveiling so you know scalability is probably there with existing customers so it remains like the number one metric to track like how many new customers can they add and if they can do hundred and then 100 rule of 40 then pretty high but yeah my actual revenue numbers 54.5ish which is 1.12

Matt same question to you what are you expecting and before you go I just want to say I think one of the reasons Pounder keeps beating on earnings is that they guided revenue of 1.087 which is basically 1.09 the street has them at 1.09 09. And this is not the same for a lot of companies. Companies will give out a guide and then the street will be overly enthusiastic about uh what they can put up because the street knows that companies tend to go lower than what they can put up and they raise the estimate which means the company has to beat the estimate. I think almost for the past seven quarters, the street has not really raised the estimate against what the company guided because every time they kept thinking there's no way they're going to be able to actually accelerate at the level that they say they will and they don't want to get too optimistic and then pounder beats by a wide margin and the stock goes crazy because perception is reality and the expectation or the perception of the growth ends up not being reality when pounder overdelivers. So Matt, do you think that is something we could get again going into Q3?

I think so. I mean, I'm I'm thinking that they continually know where they're at and they want to knowingly beat analyst expectations. Um, and so I think that they always try to be reasonable and I think to their own surprise, I think they see a lot of efficiency gains in quarter. And I know there's a lot to there's there's not a lot you can do. The quarters are baked in years ahead of time if you think about it. like the things that you're doing, you have to set in motion quarters upon quarters ahead of time and and there are some small tweaks that you can do to make some numbers uh come forward a little bit. But so I feel like they always have a very good grasp as to what the numbers look like. And as we've kind of seen, it's not a very cyclical business. It's a very, you know, subscriptionbased business. So you can kind of see where things are trajectory, the trajectory of things very far in advance if if things come in as expected.

I personally am thinking that we're going to have a 52% revenue growth quarter. Um, so to give people some some notes, I think we were at seven, believe it or not, 725 million uh in the year ago quarter. I'm thinking we're going to get to 1.1 billion uh which is crazy to even think about, but possible. The things I think I agree with Arie, he he posted something specifically like he he also I think was sinking north of 50%. Definitely a five handle, but I'm with him. I'm I'm curious to see how the margins show up because the cash flow ops margin and the income margin and everything showed up so strong last quarter and I'm used to seeing it kind of waver a little bit.

So, I'm curious to see if they stay where they're at because the thing that blew my mind last quarter was we entered a new territory for cash flow margin. we entered a new territory for ops margin I think being like 54 and 46 respectively or swap them. Um my thought process is is like if that's able to be maintained then my trajectory for the company and its market cap needs to be readjusted because I was always thinking we'd top out at like a 40 45%. But if we're already this much in its infancy of where the company is and they haven't even really tried to optimize for that stuff yet, then you could see something potentially growing into the the mid50s and high 60s in terms of free cash flow margin. And in that case, you're talking about, hey, when you get to 10 billion a year run rates, you're talking about potentially five to six billion dollars of free cash. Uh we already know it's a very capital-like business. Um, so I don't know, just very interesting uh thoughts about where margins might go um going into to next year.

Um, having said that, let's transition to the Nvidia partnership. Um, let me play the clip right here. It was pretty iconic seeing this at the GTC conference from Nvidia in DC. Jensen and Karp also took the stage to do CNBC together, which was quite incredible. But this was Jensen on Tuesday. discussing the partnership with Pounder.

>> This is the single fastest enterprise enterprise company in the world. Probably the single most important enterprise stack in the world today. Palunteer ontology. Anybody from Palunteer here? I was just talking to Alex earlier. This is Palunteer ontology. They take information, they take data, they take human judgment and they turn it into business insight.

We work with Palanteer to accelerate everything Palanteer does so that we could do data processing, data processing at a much much larger scale and more speed whether it's structured data of the past and of course we'll have structured data, human recorded data, unstructured data and process that data for our government, for national security and for enterprises around the world. process that data at speed of light and to find insight from it. This is what it's going to look like in the future. Palunteer is going to integrate NVIDIA so that we could process at the speed of light and at extraordinary scale. Okay, Nvidia and Palanteer.

>> They go on to do a demo uh that was uploaded as well about Lowe's and how they were integrating NVIDIA models into pounder AIP. Uh Matt, let's start with you. What was your reaction to just seeing that partnership and impact do you think it has on the company long term?

>> Yeah, I mean I think it's uh it's vital, right? I mean, Compute is is obviously a huge piece of being able to get things up and running and it matches entirely with a great partnership with with both of them, right? I mean without being able to structure things in an appropriate manner and have them automated in an appropriate manner um which is obviously putting it in an order and in a a manner that makes sense then you know why compute it at all right I mean this does doesn't make sense in terms of being able to do so

now if you're able to have things running much faster and having calculations set up that are automated you're going to be able to get things that run much smoother um time series data that shows up in a faster manner. Um the ability to to come up with models that showed that your digital twin needs to be optimized here or there or elsewhere. It'll shrink the amount of uh or shrink the amount of time it takes for each individual say calculation to take place and or it'll increase the amount of model runs that you can use to see if more optimization needs to be done.

Sometimes what ends up happening is people will say, "Well, I'll only run 100 iterations of this calculation which might have thousands of different nodes in it because of the time it takes." Well, if you're able to integrate collectively with with an Nvidia chip or or system, then you might do a thousand. You might be able to find one or two additional steps that you could take that might lead to thousands of dollars of additional uh opportunity that otherwise you might have just skipped over for time purposes, right?

Amir, your thoughts on the partnership?

>> Yeah, you know, I'm I'm not an engineer to actually understand fundamentally what a partnership with Nvidia in this capacity actually means like what's the difference, you know, prior to the partnership and after. So from my perspective, the biggest takeaway here is that Nvidia reiterates you know what Corp and the team has been you know banging on on the table for you know continuously and that is you know that ontology is like the most important part and that is what you will need in order to you know bring AI properly into the enterprise. you know being able to assign properties to any kind of data you know uh and contextualize everything in in a way that you can't do without an ontology.

So the my biggest takeaway from this you know partnership is uh Jensen Huang reiterating that ontology is the most important part and you do need it you know then in terms of like what the actual partnership does how it accelerates everything like I I don't understand that part uh yet like I would have to have it broken down to me to actually make sense of it. So, I don't know about that part, but I still think like Nvidia is now the biggest company in the world, $5 trillion market cap. They've been at the forefront of this whole AI re revolution. Everyone pays attention to them. And them coming out and saying, as you mentioned, like, yeah, it's probably the most important, you know, uh, enterprise software company in the world. Like that speaks volumes and reiterating like everything that, you know, Carpenter team has been saying about ontology in general. So that's like my biggest takeaway from all of this and uh um as you mentioned I also think that it will be kind of wakeup call to a lot of businesses out there.

last question for you guys. So they have six billion in cash. They're probably going to have 6.2 to 6.3 billion in the next quarter. No debt. Uh a lot of rumors of a stock split, a lot of rumors of acquisition. Should they be investing the money in different venture companies? I mean, I'm curious what you guys are thinking. I'll just give my thoughts real quick. I do not think there's going to be a stock split. I think that's a weird rumor that got started. I mean, you're going to need the stock to be a bit higher than 200 for them to justify splitting it. Also, there's already 2.5 billion shares outstanding. I don't think Pounder wants to have 8 10 billion shares outstanding. So, I really don't think that's going to happen.

Terms of their cash, I don't think they should do anything with their cash. I don't think they should buy back stock. And I don't think they should invest it in crypto. I don't think they should buy gold. I think they should keep it on the balance sheet, get a nice three and a half% return from money market funds and just let that cash sit there because other than investing it in sales and marketing, maybe hiring people to increase growth. I mean, like that stuff is great. I don't think they should be taking that much risk with that cash. I think having that cash and having a fortress balance sheet is really balance sheet is really important. Matt, how are you thinking of the the six billion in cash?

I mean, I don't I don't necessarily think that they should be spending it like crazy either, but I do think that there's a place to utilize some of it for venture capital and uh I think that there's a lot of people that leave unfortunately Palanteer because they have the entrepreneurial spirit and some of that money could go to help starting up some of their companies or at least fe feeding or fueling some of them if they leave on amicable terms of course. uh and and you know, Palanteer doesn't necessarily want to embed whatever they're working on into into the broader product uh line of of what's going on at at Palanteer.

I also think that one of the key things, which you know, I I I wrestle with myself, so I'm going to say it and I'm sure people will poke holes on it and it's something I've been saying for quite some time. There's a lot of partnerships that go on with the cloud businesses like AWS, Azure, Google Cloud, and that's good. I think that that should be fine because that that allows Palanteer to get up and running very quickly. But I think one of the things that could be done at a premium that Palanteer could control more so especially if there's very proprietary data uh that they want to make sure you know is very isolated and and maybe kept away from say other companies. They could create their own disperate um cloud product that is allowing them to potentially control a little bit more of the process. Granted, I know it will requires a lot of infrastructure and capital, but I think in the long run, we've seen how good of a multiple that's generated for value for some of these other companies like AWS and or sorry, Amazon, Microsoft, and Google.

Maybe it's something that's useful, but I think I would rather go the venture capital route before doing something like that because I think venture capital investing in stuff like Ouija and and some of these other things that unfortunately may or may not pan out. I think in the long run helps propel us into the next uh the next decade or or two of new industries that can arise. So that's where I would hope. Of course, I would like to see some buyback because of the the sharebased compensation. As a shareholder, I'm always trying to acquire more of the company. Um, so I'm still buying to this day. Um, and uh, I I took a long pause for a long while, but you know, since we since we met up in New York, it made sense to just continue to buy more and more of the company. I think it's a phenomenal company I want to hold for a long term.

So, I am somewhat selfish that not necessarily use it all for buybacks, right? don't don't exceed cash flow from operations but I do think that there should be 5 to 10% maybe closer to 10% of that cash flow from operations to be used for for buybacks to at least offset and I know stay at 10% that's fine but eventually you'll hopefully be able to to fully offset sharebased compensation which I think a lot of people have been complaining about for the last several years is that expansion of of share count because of sharebased compensation

>> thoughts on the cash pile Yeah, it's it's a it's a great problem to have as a company, you know, no debt and ever increasing cash pile. Uh that is an interesting thought that Matt made about having, you know, own cloud infrastructure that you can offer you know in highly sensitive stuff. But the problem the the only problem I see is that that will compress you know margins. it will you know go from a capital light business to you know quite capital uh intense business where you

have to you know because the the the problem is that we're seeing is that you know each new generation of chip you know increasingly more expensive and you need to like keep upgrading that's why you see like these capex cycles you know like for for every quarter that passes like these hypers scales are like increasing yeah we're going to be need spending like hundreds more than we expected you know over the over the coming periods. So I I don't really want Palunteer to enter that. I think they have like kind of infinite scalability with their current capital light model where they can have like extreme margins.

So I I don't know necessarily like the whole implications of what you know doing that would mean for Palunteer and its cash. I don't think they have enough cash to do that properly. they would have to take on that mo most likely you know $6 billion I don't know like how much you know building out the whole data center with the infrastructure and stuff would mean but it is an interesting thought and maybe there is such a scenario in the future where it does make sense

currently you know we always mention like well palanteer has some of the best investors you know on its board you know the co-founders you know Peter Kil uh one of the most famous investors in the world, most successful investors in the world, Alex Karp himself ran a hedge fund. So we we always thought that it was kind of strange that they didn't really go the venture route, you know, earlier, you know, um

uh even you know other co-founders like Joe Ldale also like involved in uh investments for a long time. I would have liked to see, you know, probably they're going to go public soon, but it always made sense to me, you know, if they would have a stake in Andre and it would have made sense for Andre to have a stake in Palanteer considering how tightly knit they are. H, you know, on the hardware plus software side of things, there's, you know, tiny tiny o overlap. you know, Andre does some software and I guess Palanteer in a very limited capacity does some, you know, hardware as well, but you know, not anything major. Uh, so it would have made sense to have a stake in Andrew. I would have liked that, you know, mutually, you know, to propel, you know, the West into the next generation of warfare kind of thing.

But yeah, I to to be honest, I don't really know and it's not really a problem that they have to address quite yet, you know, while um you know interest rates are where where they are just keep farming that cash. But that is a conversation that will become more and more important you know as rates come down as the yield that they they're able to get you know from um buying treasury instruments and stuff like that will come down over time most likely. So it is something to consider. I don't really have an answer like what makes most sense. As I mentioned, it is kind of a nice problem to have. They shouldn't really burn cash for the sake of burning cash either. Um, so as long as you can farm yield do that afterwards, then yeah, we can have a conversation.

But, you know, Corp has said on on multiple occasions now that they're they're not cash constrained in terms of their growth. like piling in more cash like uh burning more more cash won't ne necessarily mean meaningful increase in growth. So for now, you know, it's not really something, you know, that I'm concerning myself with too much, but a stake in Andre, maybe some other very prominent uh players in the space, you know, especially con considering they have um uh um what's the gov ramp? What's the product name? It's too early. >> Fed start. >> Fed start. Yeah. like considering they have fed start they have quite a bit of insight into the field and we've been seeing and hearing a lot you know about all of these new companies trying to compete you know in the government space you know enabled by Palanteer so they have early visibility into you know which companies might be winners there so it would make sense to you know to kind of acquire stakes in what they believe you know are aligned with their values and their core core missions you know and stuff like that so Maybe that's something that we will see in the future, but for now, you know, it's not a big problem to concern ourselves with as long as rates are, you know, as attractive as they are.

All right, there we go, folks. Thank you all for joining once again. Uh very excited to be here again. Uh we are likely not going to be doing this weekly anymore, and we talked about why in the beginning, but we will be here every single quarter. I'll be on, you know, every single day talking about pounder. Matt and me are tweeting about it. So, it's not like we're stopping the coverage. It's just the weekly edition of this likely is not needed anymore. And, you know, that's a really good thing to be honest because it was needed for four years and the company executed. I don't think any of us expected 450 billion when it was $6. But I I I also agree with what Amir said as well earlier in the show that I don't think we're ever seeing this again in our lifetimes. I mean, I really don't.

It's it's Matt, I'm curious your thoughts on it, but I I don't know if we're ever going to see a name go from six to 200 in less than three years in the way that it has. And we should really all cherish the journey we're on because we're going to look back on this 20, 30 years from now being like, man, we all across the world as strangers got to experience because of YouTube and Twitter and these live streams, uh, witnessing history for a company that will be talked about probably centuries from now in terms of how they became the most important company in the world.

Yeah, it's tough. Uh you don't think I don't think uh you'll see this very regularly. Um I mean maybe you you have a good lens on it too because you you had hood at quite cheap valuations as well. So um but it's rare and few and far between and I think one of the things is is some companies might do something like this. They might move in a manner like this, but a lot of them will be all hype and then something never really comes to fruition. This company's actually executing. They're doing really well. Um, so in that respect, you know, I feel confident that yeah, maybe the, you know, people might say, "Oh my god, they're celebrating $200." Maybe it does retrace. That's fine. I get it. It is overvalued. But in the long term, we're talking about a company that's going to be one and a half to two trillion dollars in my mind easily. And so, you know, sure, you know, t take your victory lap. If it drops to 150 bucks, that's fine. I'm still gonna be buying and uh eventually it'll be worth uh you know, $500, $600 a share easily, probably more. And um you know it'll be at some point paying dividends at some point buying back a crap ton of stock and I'll be able to borrow against it or write covered calls and continue to to live and and go about my merry way. But yeah, it's going to be very difficult to to find something like we did um at at such a a cheap valuation that uh was so misunderstood and uh got to where it is.

Yeah, I I kind of blame Amit, you know, because uh we, you know, we all used to get the question, oh, okay, Palunteer it uh like uh you know, 50x whatever. I don't even know like from where people had their averages and they're like, "Okay, okay. So, uh Palunteer like is is over now. What's the next Palanteer?" I'm like, "Dude, Palanteer is just getting started. Like, we're not even at 1,000 customers. Salesforce 200,000 customers like Palunteer like just getting started like this is nothing like Palanteer's story is not over like by far. Uh okay.

So people are like okay well what's the next talent here? Amit he went and did the same with Robin Hood like two companies doing the same thing like normalizing this kind of thing like like oh so so what's next Palunteer and Hood like you see you seem to pick them so often I mean so tell us what's next Palanteer Hood like people he he he has normalized this thing where people don't actually realize how extremely rare it is to find these kind of high quality businesses that are executing to this degree growing the way they are like uh so I fully blame Amit every time I get that question like what's the next palenteer because you know he just seems to keep making more and more of these so let us know amit when you find the next one and then we can do a weekly for that company as well

There you go. Thank you everybody. Appreciate it. Fats, thank you for the super chat. Happy Halloween. Congrats on the conviction. The good and bad times well deserved. Callie, thank you for the 100 super chat as well. Very, very kind of you. Absolutely means the world when I meet these two guys. I'll make sure to get them a drink from these super chats. And uh yeah, hopefully everyone has a great weekend and we'll see you guys on Monday for per pounder earnings.

>> Good seeing you both and happy 200. >> Yeah, likewise. See you guys on Monday. Gonna

>> All right. Thank everybody. Appreciate it. We'll be back Monday for pound earnings. Good night everybody.