Could Investing $50,000 in Palantir Stock Make You a Millionaire?

Finding the next stock that could make you a millionaire is obviously appealing to many people. However, it’s rare to find a company that actually has the potential to grow enough to allow you to become a millionaire from a single investment.

To turn $50,000 into $1 million, the stock price would have to increase 20-fold. That’s a tall order, a feat that few companies can accomplish. Some have pointed out that one stock with that potential is Palantir (NYSE: PLTR)because its artificial intelligence (AI) software could become mainstream. So could a $50,000 investment in Palantir make you a millionaire?

Palantir’s AI platform gains popularity

Part of Palantir’s appeal lies in its dual-client structure. Palantir originally created software for government use only. That lucrative market still accounts for more than half of Palantir’s revenue today. But Palantir recognized the utility of its AI software beyond the purely government realm and expanded into the commercial side of the business, which has seen phenomenal growth.

Palantir’s software can be deployed in virtually any industry because Palantir’s operating principle is simple: data is input and information is extracted. So whether an intelligence agency is using it to track down a terrorist (which Palantir reportedly helped do with Osama bin Laden), efficiently schedule hospital staff, or optimize a supply chain, Palantir has a solution for you.

Its latest product, Artificial Intelligence Platform (AIP), has been a huge success because it allows customers to integrate AI solutions into every facet of a business.

Management said demand for AIP was “unprecedented” and was a key reason why revenue from its U.S. commercial customers increased 40% year over year in the first quarter.

But does all this add up to a stock that can increase by up to 20 times?

Palantir’s growth would have to be incredible to achieve this feat

Although Palantir generated $634 million in revenue in the first quarter, its customer base is relatively small. In the United States, Palantir only Palantir had 262 customers. There are many more companies in the United States, so Palantir has plenty of room for growth.

Palantir’s software does have one drawback, however: its cost. Dividing U.S. commercial revenue by the number of U.S. commercial customers gives the average price spent per customer. That figure is $573,000. Keep in mind that this is only quarterly revenue, so the annual cost would be over $2 million. Not all companies can afford this, so their customer base is limited, unless Palantir comes up with cheaper software to capture the low-end of the market.

The story continues

However, if a company spends 1% of its total revenue on Palantir’s software (assuming an annual spend of $2 million), then any company with revenue over $200 million could afford Palantir’s software. Thousands of companies meet this guideline, so Palantir could still meet this expectation.

To do a quick calculation, if Palantir were to trade for 13 times sales (the same level as Adobegold…