Planet Labs shares have crashed 66 percent from their May 28 peak of $51 to around $17.50, but CNBC's Jim Cramer sees a compelling entry point for long-term investors.

The sell-off accelerated in June after the company authorized a $1.5 billion stock-sale program. Shares then tumbled from late August through mid-September, falling on 14 of 15 trading days. Despite the collapse, Cramer argues fundamentals have actually strengthened.

Cramer's bull case rests on three pillars: valuation reset, business acceleration, and AI optionality.

On valuation, Planet Labs now trades at roughly 14 times 2027 fiscal year sales—a significant markdown from May's multiples when the stock was elevated. For comparison, the company was a penny stock recently.

On business momentum, the numbers stack up. Fiscal second-quarter revenue jumped 58 percent to $116.1 million. More tellingly, defense and intelligence revenue—the company's core growth driver—surged more than 90 percent in the same period. Management has identified approximately $4 billion in satellite services opportunities, with about $1 billion considered near-term.

The AI catalyst materialized last week. Google's Project Suncatcher launched a prototype satellite carrying four custom AI chips into orbit in collaboration with Planet Labs. This validates the company's technology and could unlock new revenue streams beyond traditional satellite imagery analysis. Shares jumped 8 percent on Friday.

Cramer's positioning: buy a starter position now and add on any further weakness. He notes that AI could dramatically enhance the value of Planet Labs' imagery archive by automating analysis and spawning new applications.

The risk: Planet Labs has raised its annual capital expenditure guidance to $100 million to $115 million from $80 million to $95 million, pressuring near-term free cash flow as the company builds and replaces satellites. This spending matters for cash generation metrics investors watch.

At current levels, Cramer sees risk-reward heavily skewed to the upside for investors with a multi-year horizon.