Chancellor election 2025 - now it is getting exciting! Explosive news at Palantir, D-Wave, European Lithium, and SAP

Palantir Technologies – What is next, Alex Karp?

A 25% drop at Palantir last week. Insiders are attracting attention again with sales. Billions in sales and looming cuts in the US defense budget have put significant pressure on the stock. While the Company has recently benefited from AI hype and armament fantasies, the current developments could significantly slow growth. Peter Thiel and other early investors have announced plans to sell shares worth over USD 1.4 billion. Thiel already realized USD 1.5 billion in 2024, but had he held on to his positions, they would now be worth USD 5.2 billion. Despite these massive sales, the founders retain control of the Company through special founder shares. The news from the Pentagon about planned cuts to the US defense budget is also a burden. The 8% annual savings announced by Defense Secretary Pete Hegseth could severely impact the supplier of critical information. Last year, government contracts accounted for almost 42% of the Company's total revenue. Then there is the completely inflated price-to-sales ratio for 2025 of 70 – an unprecedented level in the S&P 500 index. Lift the stop loss to EUR 93, and profits will be preserved in an emergency.

European Lithium – A potpourri of positive developments

This week is also an exciting one for European Lithium. The Australian explorer owns a flagship lithium property in Austria, three further lithium deposits in Ukraine and Ireland, and a rare earths project in Greenland. This gives the Company a key role in the global resource landscape. While the political relationship with China continues to deteriorate, raw material deposits in Western jurisdictions are receiving special attention under Donald Trump and the EU. The more than 60% stake in NASDAQ-listed Critical Metals Corp. (CRML), which was able to raise a further USD 24.5 million in February, is also important.

European Lithium's current orientation thus adds up to a unique future portfolio. Under the Union, the promotion of electric vehicles is to be introduced as quickly as possible to bring the topic back into focus. The Critical Metals investment has already sealed a USD 15 million purchase agreement with BMW and has also sealed a joint venture with the Arab Obeikan Investment Group for refining. Local subsidies for international industrial settlement, lower energy costs, and tax incentives make this option particularly attractive.

In 2023, the EU decided that by 2030, at least 10% of the demand for strategic raw materials should be covered by domestic production and that 40% of the raw materials should also be processed in the EU. Should a quick ceasefire in Ukraine be possible, the lithium properties of Dobra and Shevchenlivske will be in the spotlight. Donald Trump's intentions in Greenland sound outrageous, yet it sheds new light on the Tanbreez rare earth project. At the end of February, the lock-up period for the majority stake in CRML finally expires. This means several million shares could now be sold to strengthen the cash position. The kicker: investors get the entire "options portfolio", worth billions, with the European Lithium share at AUD 0.052, or a market capitalization of a low EUR 46 million. Unbelievable!

European Lithium will be represented by Executive Chairman Tony Sage at the 14th International Investment Forum tomorrow, Tuesday, February 25. The story is a hot topic. Free registration is available here.

SAP – The cloud business is picking up

The stock market highflyer SAP is increasing its dividend for 2024 by 6.8% to EUR 2.35 per share and continues to benefit from its booming cloud business. The Walldorf-based software company is thus impressively continuing its successful course. This increase not only underscores SAP's solid financial position but is also a thank you to investors for their support during the sometimes difficult situation of the last four years when the share price halved at times. The main driver of the Company's success is its rapidly growing cloud business. Adjusted for currency effects, this future-oriented sector saw an impressive 29% increase in revenue to over EUR 18 billion. In total, Germany's most valuable listed company in the cloud sector now has an order backlog of more than EUR 63 billion. With a DAX index share of almost 16%, SAP has become the undisputed heavyweight in the German leading index. Analysts on the LSEG platform see an average target price of EUR 282.50. This was already exceeded last week, but Goldman Sachs even considers a price target of EUR 320 achievable. The announced AI product initiatives could help overcome the current 2025 P/E ratio of 43.

D-Wave – Taking it to the extreme

In terms of valuation, the quantum computing stock D-Wave Quantum has gotten completely out of hand. With a performance of over 330% in the last 3 months, it is hard to stop, but investors should note that the price-to-sales ratio is over 20 even for 2028. Of course, it is possible that the Company could unexpectedly triple its revenue each year. If that is the case, one might understand the current market capitalization of over EUR 2 billion. So, do not be surprised if, during a prolonged tech correction, a loss of over 80% occurs. Take advantage of the current euphoria to cash out. High momentum premiums are available twice a week.

The German federal election has explosive potential. The stock market has experienced major euphoric rises in recent weeks. Many were betting on major "change" in German politics. Whether this is even possible with the current outcome seems highly questionable. Highflyer Palantir has already lost 25%, with D-Wave still holding up well. European Lithium is a promising option for possible peace in Ukraine and a new electric boom.