Planet Labs Stock Plunges as Google AI Satellite Launches

Planet Labs (NYSE: PL) has seen its stock plummet 66% from its May peak, despite a strong underlying business and new opportunities tied to AI, defense, and satellite data. The company recently helped launch Google’s first Project Suncatcher prototype into low Earth orbit, which includes four of Google’s Tensor Processing Units (TPUs) to test AI computing in space. While the experiment is still in its early stages, Google aims to create orbital computing infrastructure, potentially bypassing some of the constraints faced by terrestrial data centers.

Planet Labs’ core business continues to grow, with record fiscal second-quarter revenue of $116.1 million, up 58% year over year. The company’s backlog reached $814.9 million, with half expected to be recognized over the next 12 months. Its financial profile is improving, with $865 million in cash and short-term investments and adjusted EBITDA of $13.9 million. The company is also expanding its role in defense and intelligence, where persistent satellite imagery is crucial for real-time information.

Jim Cramer, during the Oct. 2 "Mad Money" Lightning Round, called Planet Labs a "terrific" company and suggested investors buy the stock, believing it is "done going down." However, the stock’s dramatic reversal from its May high of $51.76 highlights the gap between investor expectations and the company’s current performance. The success of the Google satellite launch is seen as a test of Planet’s long-term opportunity, with orbital AI potentially opening new markets for the company.