Palantir Technologies Surges 6.37% Amid High Volume but Warns of Overextended Valuation Risks

Technical Analysis

Palantir Technologies Inc. (PLTR) closed on March 24, 2025, at $96.75, marking a significant day-over-day increase of 6.37%. The intraday range was between $92.28 and $97.38, indicating a volatile session. The volume was 111.17 million, which exceeded the average by 14.27%, suggesting strong trader interest. The RSI of 60 implies a slightly bullish momentum but not yet overbought.

The stock's 50-day moving average is $89.01, while the 200-day moving average stands at $54.62, indicating a strong uptrend. However, the 3-month MACD value of -10.95 reflects a potential bearish divergence, warranting caution. The Average True Range (ATR) of 6.99 signifies considerable price swings, hence, risk-averse traders should note the stop-loss at $91.83.

Support is observed at $90.68 and resistance at $103.83. A break above the resistance could lead to a rally, but failure to hold above current levels may test the support.

Fundamental Analysis

With a P/E ratio of 509.21, Palantir's valuation seems stretched. The earnings per share (EPS) is $0.19, and the market cap is $226.91 billion. The recent inclusion in the S&P 100 and its significant performance gains support its credentials, yet the DCF valuation suggests an intrinsic value far below the current price ($3.60).

Strategically, the company has capitalized on AI demand, evidenced by a 36% YoY sales increase in Q4 2024 and a record 45% operating income margin. Despite these fundamentals, its current market valuation prices in significant growth, which could be at risk if growth targets aren't met. Short-term support remains at $90.68; breaching this could trigger further declines, notably with volatile trading reflected by ATR.

Strong trader interest may aid performance throughout the coming week, but any movements will likely respond closely to broader market conditions and additional news catalysts. Given RSI is approaching overbought levels, potential consolidation could occur after the recent rally. Despite the compelling story, the current valuation appears overextended with respect to DCF and P/E, indicating that the market might have overly optimistic future growth expectations.

Nevertheless, Palantir's strategic positioning in AI and big data spaces offers robust potential, provided it can sustain growth and justify its current valuation through operational execution and innovation.

Overall Evaluation: 'Hold' Candidate

Palantir Technologies Inc., despite its recent rally and strategic potential, is categorized as a 'Hold'. This categorization reflects its stretched valuation metrics juxtaposed with its promising growth prospects in AI and analytics, compelling current investors to wait for more favorable risk-reward opportunities or additional confirmation of sustainable growth before considering further action.