Buying the NEXT Palantir NOW!!
Summary
Luke’s primary thesis is that SoFi (SOFI) is the "next Palantir style stock," mirroring the trajectory of a company whose fundamentals improve for years while the market ignores or doubts it. He outlines five specific reasons for this comparison: consistently improving fundamentals over 20 quarters, a high-level management team led by Anthony Noto, a stock price that has remained suppressed for years, extreme retail pessimism, and a narrative focused on dilution and "dead money." Luke believes this environment creates a "dream scenario" for long-term investors to accumulate shares at undervalued prices.
Regarding the market outlook, Luke suggests that while a parabolic "Palantir-style" run beyond fair value is rare, SoFi has the potential for a 5X return over a five-year horizon if management continues to execute. He emphasizes that the current market sentiment is blinded by hindsight and short-term thinking, often missing high-growth opportunities that are hiding in plain sight. He notes that the current price is around $15, but highlights that the best returns come to those who built positions when the stock was lower.
Mentioned Stocks
Reasoning: Luke mentions AMD as an example of a successful investment where his group bought shares under $100 while the stock was 'laying down' for a long time. He uses it to illustrate that patience in fundamentally strong companies eventually leads to 'epic runs,' as seen with AMD's performance over the last year.
Reasoning: Luke compares SoFi to Palantir’s early days, citing 20 quarters of improving fundamentals, including revenue and EPS growth. He praises CEO Anthony Noto’s execution and the company's 40% growth rate. Luke views the suppressed stock price and negative retail sentiment as a 'dream scenario' to accumulate shares. He explicitly states he is continuing to buy the stock as long as it stays undervalued. He mentions that while the current price is approximately $15, an average cost basis of $10-$12 could realistically lead to a 5X return over five years.
Reasoning: Luke uses Palantir as a primary comparison for SoFi, noting he previously made a 'fortune' buying it at $6 and holding through years of stagnation. However, he notes the stock is currently struggling to move higher because it previously pumped way beyond fair value, regardless of its 'greatest of all time' quarters. He views it as a great company that is currently consolidation after an unsustainable run.