Palantir Technologies (PLTR) stock has come under pressure last week, with shares falling nearly 10% and marking the company’s longest losing streak in more than a year. The decline hurt investors but gave short sellers billions in paper gains. Despite this setback, Palantir is still up about 109% year-to-date, leaving Wall Street divided on whether the recent pullback is just a short pause or the beginning of a longer decline.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Bulls Point to Strong Growth and AI Momentum
Palantir’s recent decline has not shaken the confidence of bullish investors. PLTR bulls see continued upside in the stock, driven by the demand for the data analytics company’s artificial intelligence (AI)-powered offerings. In the second quarter earnings call, the company reported 48% year-over-year revenue growth, crossing the $1 billion mark in quarterly sales for the first time.
Analysts see Palantir’s growth being driven by two key engines. The first is its government defense contracts, which continue to provide steady revenue. The second is its expanding commercial AI platforms, where demand has been rising at a fast pace. For instance, a healthcare company recently signed a contract worth $88 million only months after adopting Palantir’s AI Platform (AIP), reflecting its rapid enterprise adoption.
They believe these strengths help justify the company’s premium valuation, even if short-term volatility in the stock price continues.
Bears Warn of Valuation Risk
Despite Palantir’s strong momentum, bearish investors argue that the stock looks significantly overvalued. Recently, renowned short-seller Andrew Left of Citron Research said that Palantir is one of the most expensive software companies on the market.
Short sellers have also been active, gaining over $1.6 billion in profits during the recent pullback. They believe that much of the rally has been driven by speculative trading rather than fundamentals.
Bears warn that if AI enthusiasm cools or PLTR’s contract wins slow, the stock could see further downside.
Is PLTR a Good Stock to Buy Now?
According to TipRanks consensus, PLTR stock has a Hold rating, based on five Buys, 13 Holds, and two Sells assigned in the last three months. The average Palantir share price target is $156.78, which implies a downside of 1.23% from current levels.
Source link
