Palantir's Technical Analysis Points to Continued Bullish Momentum, 1 week ago

Palantir Technical Analysis

Palantir Technologies Inc. (NYSE: PLTR) closed at $28.42 on July 10, 2024, marking a 3.76% increase over the previous day’s close and establishing a new 52-week high at $28.47. The stock has seen a significant upward movement over the past year, reflecting an 80% gain. The relative strength index (RSI14) of 66 suggests that the stock is approaching overbought territory but is not quite there yet. Current momentum remains strong, confirmed by the 50-day Moving Average (MA) of $23.17 and the 200-day MA of $20.52, both well below the current trading price.

The Moving Average Convergence Divergence (MACD) of 1.28 indicates bullish sentiment, suggesting further upward momentum. However, with the Average True Range (ATR) at 3.55, investors should be cautious of potential volatility in the near term. The stock’s immediate stop-loss is identified at $27.52 with support at $25.21. No immediate resistance levels are noted, indicating potential for continued upward movement.

For the next trading day, likely influenced by recent bullish sentiment and strong AI-related partnerships, Palantir’s stock is expected to remain steady or potentially increase slightly. The overall upward trend coupled with robust volume supports a positive outlook for the following week, although the ATR underscores the need to watch for possible price swings.

Fundamental Analysis

Palantir Technologies boasts a market cap of $60.54 billion and a Price-to-Earnings (PE) ratio of 236.83, suggesting that the stock is highly valued relative to its current earnings. The Earnings Per Share (EPS) stands at $0.12, low in comparison to its valuation, which may be a concern for some investors. Palantir’s next earnings announcement is slated for August 5, 2024, which could significantly influence its stock price.

Palantir From a discounted cash flow (DCF) standpoint, the stock's value is notably below its current market price, indicating it might be overvalued. Analyst consensus targets predict variability with a target high of $35 and a target low of $4.50, placing the median at $15. The consensus indicates potential for a lower valuation, posing mixed signals about the stock's intrinsic worth.

Recent news underscores Palantir's role as a leader in the AI sector, highlighting its real-world application and growth prospects. Despite Palantir's prominent role in AI, some analysts express skepticism, anticipating a substantial downturn. In particular, notable analysts from RBC Capital Markets and Morningstar foresee significant dips in its value.

Intrinsic Value and Long-Term Investment Potential

Evaluating the intrinsic value of Palantir reveals a complex picture. The firm's rapid ascension in the AI domain might counterbalance current valuation concerns, making it potentially attractive for long-term investors confident in the AI industry's expansion.

Overall Evaluation

A synthesis of technical and fundamental indicators, alongside recent news, paints a mixed picture for Palantir Technologies Inc. Despite its strong short-term performance and dominant role in AI, valuation concerns remain significant.

Given the analysis, Palantir is categorized as a 'Hold' candidate. Current investors may want to retain their position due to the bullish momentum and forthcoming earnings report, which could present further insights. However, the high PE ratio, DCF valuation discrepancy, and potential volatility call for a cautious approach. Palantir's notable position in the AI industry may sustain its growth trajectory, warranting a watchful stance on future developments and quarterly performance.

Check full Palantir forecast and analysis here.