The software manufacturer Snowflake $SNOW (+0.39%) decided on Monday to include DeepSeek's models in its marketplace for AI models after receiving a number of customer requests.

As employees also described the models from

DeepSeek's models as "amazing", the US software provider weighed up the

the potential risks of hosting AI technology developed in China before finally deci

before finally deciding to offer it to its customers, said

Christian Kleinerman, executive vice president of product at Snowflake.

"We decided that

we don't see any problems in supporting this technology as long as we are clear

clear to our customers," he said.

In the meantime, the

American AI developers are rushing to analyze DeepSeek's V3 model.

DeepSeek published a research paper in December on the model, which

the basis for its popular app, but many questions such as the total development cost

are not answered in the document.

China is now from 18 months to

six months behind the most advanced AI models developed in the US, a person said.

developed in the US, one person said. Since DeepSeek has caused such a stir with its strategy of

free release strategy is causing such a stir, the company may soon run out of

may soon run out of chips to meet demand, this person predicted.

person predicted.

DeepSeek's progress

is not only based on a modest budget of 6 million dollars - a

a tiny sum compared to the 250 billion dollars that analysts estimate large

that analysts estimate large US cloud companies will spend on AI infrastructure this year.

will spend this year. The study points out that these costs relate

specifically refer to chip usage for the final training run and not to the entire

to the total development costs.

The training run is just the tip of the iceberg

of the iceberg in terms of overall costs, executives from two top labs told Reuters.

top labs told Reuters. The cost of determining the design of the

training run can be many times higher, they said.

The paper states that the

training run for V3 was conducted using 2,048 H800 chips from Nvidia, which were

designed to comply with US export controls enacted in 2022

rules that experts told Reuters would do little to slow China's AI progress.

would hardly slow it down.

Sources at two AI labs said,

they had expected that earlier stages of development would have relied on a much larger

amount of chips. One of the people said that such an

such an investment could have cost more than 1 billion dollars.

Some American

AI executives praised DeepSeek's decision to release its models as open source, which

source, meaning that other companies or individuals can freely use or modify them.

individuals can freely use or modify them.

"DeepSeek R1 is one of the most

most amazing and impressive achievements I have ever seen, and as open source

- and a great gift to the world as open source," said venture capitalist

venture capitalist Marc Andreessen in an article on X am Sonntag.

The acclaim that the models from

DeepSeek's models underlines the viability of open source

open-source AI technology as an alternative to costly and tightly controlled

controlled technologies such as OpenAI's ChatGPT, according to industry observers.

The most valuable companies on

Wall Street have risen in recent years on the expectation that only they have

have access to the enormous capital and computing power needed to develop and scale new

required to develop and scale new AI technologies. These

assumptions will be further tested this week and next when many

when many American tech giants report their quarterly results.

will present their quarterly results.

Is Snowflake $SNOW (+0.39%) a risky investment?

External fund manager Li Lu, backed by Berkshire Hathaway's Charlie Munger, doesn't mince his words when he says: "The biggest investment risk is not price volatility, but whether you will suffer a permanent loss of capital. When we think about how risky a company is, we always like to look at how it takes on debt, because over-indebtedness can lead to ruin. We can see that Snowflake Inc ( $SNOW ) uses debt in its business. However, the more important question is: How much risk does this debt pose?

When is debt a problem?

In general, debt only becomes a real problem when a company cannot easily repay it, either by raising capital or through its own cash flow. If the company cannot meet its legal obligations to repay the debt, shareholders are ultimately left empty-handed. However, a more common (but still costly) case is where a company has to issue shares at knock-down prices, permanently diluting shareholders, just to shore up its balance sheet. Most commonly, however, a company manages its debt reasonably well - and to its own advantage. When considering how much debt a company has, the first thing to look at is cash and debt together.

What is Snowflake's debt level?

As you can see below, Snowflake had $2.27 billion in debt at the end of October 2024, whereas a year ago it had no debt. Click on the image to see more details. However, this is offset by US$4.16 billion in cash, which means a net cash balance of US$1.89 billion.

How healthy is Snowflake's balance sheet?

The most recent balance sheet shows that Snowflake has liabilities of US$2.65 billion within one year and liabilities of US$2.62 billion thereafter. This compares with US$4.16 billion in cash and US$618.9 million in receivables due within 12 months. Its liabilities therefore exceed the sum of its cash and (current) receivables by US$ 492.0 million.

Given the size of Snowflake, its cash and cash equivalents appear to be in balance with its total liabilities. So it's very unlikely that the US$56.4 billion company is short of cash, but it's still worth keeping an eye on the balance sheet. Despite its considerable liabilities, Snowflake has net cash, so it's fair to say that the company doesn't have a heavy debt load! The balance sheet is clearly the area to focus on when analyzing debt. Ultimately, however, the future profitability of the company will determine whether Snowflake can strengthen its balance sheet over time.

On a 12-month view, Snowflake reported revenue of $3.4 billion, up 30%, although the company did not report earnings before interest and taxes. With any luck, the company will be able to find its way to profitability.

So how risky is Snowflake?

Snowflake lost money at the earnings before interest and tax (EBIT) level, but generated positive free cash flow of $793 million. So although Snowflake is making losses, the company does not appear to have too much short-term balance sheet risk given its net cash position. The good news for Snowflake shareholders is that the company is experiencing strong revenue growth, which will make it easier to raise capital when needed. However, this does not change our view that the stock is risky. The balance sheet is clearly the area to focus on when analyzing debt. But ultimately, any company can have off-balance sheet risks.

Source: https://simplywall.st/de/stocks/us/software/nyse-snow/snowflake/news/ist-snowflake-nysesnow-eine-riskante-investition

How do you see it? Who is invested?

So now it's time for me to introduce myself. I've been reading your posts for quite a while now. And I've been able to glean a lot of knowledge here.

About myself, I am 47 years young, married and an employee of a medium-sized company. I have been working intensively on the topic of investing in shares since May 2024. Before that, however, I had already dealt with the topic of investing, but was dazzled by financial advisors etc.. I had invested a lot in investment funds and life insurance policies. However, the returns fell by the wayside.

Until I started looking into ETFs and shares. As is so often the case, the financial advisors naturally wanted to talk me down about the enormous risk I was taking and that a fund would bring much higher returns, etc. etc.

Long story short, I decided to go down this path anyway. I started with a Robovisor (growney). Here I was able to gain my first experience with ETFs.

But I quickly realized that I wanted more, i.e. I wanted to get more involved with ETFs and shares and find my own strategy that suited me. So I opened a securities account with an online broker and then, after intensive research on YouTube, getquin and Google, I started to create my own securities account.

In the meantime, I canceled all my funds and life insurance policies and reallocated my assets.

In May 2024, I then started to build up my own portfolio. So 2024 was more of a practice year. I have now built up my portfolio to the point where I feel comfortable with it.

Now to my strategy, I want to build up assets until I retire

My core is the

$VWCE (-0.55%) This is where the largest monthly savings installment goes in

$EWG2 (+0.49%) I see gold as a small security and stability for my portfolio, which will be expanded in small steps.

$XEON (+0.01%) Money market ETF is our emergency fund, which will be expanded in small steps, as repairs etc. are also paid from here.

$BTC (-0.32%) I see Bitcoin as a long-term investment, this will also be further expanded via a savings plan, but I would also like to realize partial profits in the future

Then I have decided on a few individual stocks, which I have selected so that they are not so highly weighted in my core and where I see growth potential in the future. These will be held for the medium to long term and expanded with savings plans.

$NU (-1.31%)
$HIMS (+10.05%)
$ASML (+0.42%)
$SFM (+1.66%)
$NOVO B (-0.43%)
$SHOP (-1.52%)
$SNOW (+0.39%)
$SP20 (+0.55%) The S&P 500 Top20 serves as a small yield booster, but it remains to be seen...otherwise it will be reallocated to the all World

That's it for now, I'm always open to constructive criticism and improvements. I'm looking forward to an exciting time here.

$NU (-1.31%)

Nu is a leader in digital banking in Brazil and Latin America

1. Nu reaches around 53% of the adult population in Brazil.

2. Customer acquisition cost (CAC) of USD 7, and service cost per customer around 85% lower than traditional banks.

$ASML (+0.42%)

World leader in lithography equipment, ASML is a key player in the semiconductor industry.

1. ASML has a worldwide monopoly on systems (extreme ultraviolet lithography)

2.31% ROIC and 51% EBITDA margin above industry standards

$GTT (+0.51%)

Major player in cryogenic technologies applied to the transport and storage of liquefied gases

1. Key market for the energy transition, growing by CAGR 27% 2024-2032

2. Exceptional EBITDA margin of 54.9

3. Portfolio of 3,295 active patents

$SNOW (+0.39%)

Leader in cloud-based data management

1. Premium customer base: 542 customers generating over $1m and high net retention (127% in Q3 FY2025).

2. Multi-cloud architecture with advanced capabilities for secure data collaboration

$JD (-3.44%)

A key player in logistics and technology services for e-commerce

1. Same-day or next-day delivery to over 90% of the Chinese population thanks to its logistics park

2. Attractive valuation (PER 11.52x)

$MNSO (-2.63%)

International retailer specializing in lifestyle and design products

1. Rapid growth in key regions such as Latin America (+18.7%) and North America (+89% by 2024).

2. Innovation: 940 new products introduced every month

$RHM (+0.49%)

European leader in defense and mobility technology.

1. Visibility of revenues: order book of 38.3 billion euros

2. Diversification between defense and civil mobility

$OSIS (+0.53%)

Global Leader in Security, Healthcare and Optoelectronics Technologies

1. Technological advantage with products such as CertScan® or RTT® 110

2, 40% recurring revenue from turnkey solutions and maintenance

$WHD (-1.7%)

Specialized in drilling and pressure control technologies for the oil and gas industry

1. Market leader in the United States

2. Return on Equity > 30

$TGLS (-2.13%)

Company specializing in the manufacture and installation of glass for the construction industry

1. Sector leader in the US where construction will benefit from D. Trump's policies

2. EBITDA margin > 25% and 2-figure growth over the last 3 years

$SNOW (+0.39%)

I decided to take profits here. Snowlfake was bought as a speculation on the further recovery of Tech. The share does not fit into my investment strategy.

Like many in the sector, there is a lot of hype here. As I don't want to make the same mistakes as in 2021 and stay at the party too long only to go home with a hangover afterwards, I got out.

I can understand the broad outlines of the business model, but at this valuation the air is getting thin and therefore the scope for misjudgement is getting smaller.

Holding period <6 M

45% price gain

Podcast episode 69 "Buy High. Sell Low."

Subscribe to the podcast to make 2025 good.

00:00:00 Portfolio Max

00:30:00 Portfolio Juri

01:22:00 Portfolio Stephan

Spotify

https://open.spotify.com/episode/21rBlhDGjWHtKgUnAWB1Zj?si=AWdM-sIdReWRfMGyCwt0DA

YouTube

Apple Podcast

https://podcasts.apple.com/de/podcast/folge-69-jahresr%C3%BCckblick-portfolio-performance/id1695869891?i=1000681721764

$MSFT (-0.04%)
$PLTR (+2.61%)
$MSTR (-1.08%)
$BTC (-0.32%)
$AMD (-1.66%)
$COIN (-0%)
$NOVO B (-0.43%)
$APP (+0.93%)
$SNOW (+0.39%)
$IWDA (-0.45%)
$BLK
$SOL (-2.61%)

+++ Palantir Technologies Inc. (PLTR) - A brief analysis +++

$PLTR (+2.61%) is a leading data analytics and artificial intelligence (AI) company characterized by its innovative technology and strong focus on safety-critical applications in both the public and private sectors. Since its IPO in 2020, Palantir has attracted both enthusiasm and criticism - not only because of the disruptive nature of its business model, but also because of its dependence on government contracts and its sometimes aggressive valuation on the stock market.

In 2024, Palantir has made significant progress, both in its financial results and by increasing its market presence in the field of artificial intelligence. However, the stock has become a point of contention as it is currently at historically high levels, while many analysts point to potential risks and overvaluation.

After Palantir has generated more than 300% returns in one year, there is such fomo in the market but also on getquin, is this justified?

1. business areas and products

Palantir specializes in providing complex data analytics to help businesses and governments make critical decisions. The company offers two main platforms:

1.1 Palantir Gotham

• Target group: Primarily governments, security agencies and the military.
• Function: Facilitates the evaluation of large, unstructured data volumes in order to detect threats at an early stage and optimize decisions in security-relevant areas.
• Areas of application: Counter-terrorism, military operations, national security.

1.2 Palantir Foundry

• Target group: Companies in various industries, including energy, healthcare and finance.
• Function: Enables integration and analysis of disparate data sources to optimize processes and make strategic decisions.
• Growth: Foundry has grown in importance in recent years as companies increasingly rely on data-driven decisions.

1.3 Apollo

• Target group: Both public and private clients.
• Function: Provides real-time AI-driven decision-making processes and ensures that Palantir's software can be continuously updated and scaled.
• Significance: This platform is considered a key product driving Palantir's expansion in the field of artificial intelligence.

2. market position and competitive environment

Palantir operates in a highly competitive market. Its main competitors include:

• Snowflake $SNOW (+0.39%)
  : Focus on cloud-based data platforms.
• Databricks $DBRX Specialized in machine learning and big data analytics.
• Google Cloud and Microsoft Azure $GOOGL (+1.9%) & $MSFT (-0.04%) Also offer AI and data analysis solutions, but benefit from their broader product portfolio

Strengths of Palantir:

• Proprietary technology: Palantir develops customized solutions that are deeply integrated into customers' workflows.
• High barriers to entry: Palantir's complex and specific applications create long-term customer loyalty.
• Strong customer base: Over 60% of sales come from long-term contracts with governments and large corporations.
• Huge market: The AI market has huge expected CAGR over the next few years (and we are still at the beginning of this journey)

Weaknesses:

• Dependence on the public sector: Significant portion of revenue comes from government contracts, making the company vulnerable to budget cuts.
• High cost structure: Despite the scalability of the products, the cost base remains relatively high due to high development spend and customer acquisition.
• Share dilution: In recent years, Palantir has increased its outstanding shares by 20%

3. recent developments and strategic initiatives

3.1 New contracts and partnerships

• Contract with the US Department of Defense: Palantir was awarded a contract worth USD 36.8 million in December 2024 to support the U.S. Special Operations Command. This strengthens market leadership in the defense sector.
• Partnerships with AWS and L3Harris: These collaborations aim to extend the reach and functionality of Palantir's platforms in the military and commercial sectors.
• Healthcare sector: Palantir is working with leading pharmaceutical companies to provide AI solutions for clinical trials, drug discovery and supply chain optimization.

3.2 Artificial intelligence as a growth driver

The integration of generative AI and advanced analytics into the existing platforms has contributed significantly to the increase in sales in 2024. Customers are increasingly relying on Palantir to automate AI-driven decision-making processes.

3.3 International expansion

Palantir has strengthened its presence in Europe and Asia. The company is becoming increasingly important, particularly in the area of critical infrastructure analysis, as governments and companies arm themselves against cyber threats.

4.1 Current results (Q3 2024)

• Revenue: USD 725 million (+30% compared to the previous year).
• Gross margin: Over 80%, underlining the high scalability of the business model.
• Net result: Fourth consecutive GAAP-positive quarter, a milestone in the company's history.
• Free cash flow: Over USD 300 million, indicating strong operational efficiency.

4.2 Forecasts for 2024

• Total expected revenue: Over USD 3 billion.
• Growth drivers: Increase in government contracts, rising adoption of AI solutions and expansion in the commercial sector.

4.3 Valuation

The share is currently valued at a price/earnings (P/E) ratio of over 400, based on expected earnings for 2025 in bullish scenarios at 150. This indicates a very optimistic market expectation.

This shows that Palantir is currently valued historically (very expensive), given the status quo growth!

Here is a comparison of the dotcom ratings of well-known companies (P/S ratio) - Palantir currently has a 60 P/S ratio.

5 Valuation

With a current price of around USD 72 (as at December 2024), the share is trading well above its fair value of USD 19 as estimated by Morningstar. This could lead to sharp price losses in the event of disappointing results or negative news, but also shows how wide the discrepancy in valuation currently is!

6. fair value estimate

Based on the discounted cash flow model (DCF) and taking into account a conservative growth rate of 20%, the fair value amounts to USD 25. This estimate takes into account the long-term opportunities offered by AI, but also the risks of a potential slowdown in growth and the high dependence on government contracts, but with old valuation schemes that are not always based on growth values!

Conclusion

In my opinion, PLTR is currently historically expensive, with lower growth opportunities than other companies in the market e.g. $HIMS (+10.05%)

For this reason, I am currently waiting for healthy profit-taking and continue to look at Palantir's business model!

👍 = I am not invested

❤ = I am invested

If this article has provided you with any added value, I would be delighted to receive a few Getquin coins :)