Palantir Stock Battles Back For Weekly Gain Despite Valuation Worries
BENJAMIN PIMENTEL
Palantir stock battled back to positive territory Friday as shares of the AI powerhouse capped the week with a solid gain.
After a wobbly start, Palantir (PLTR) rallied 8.5% to close at 80.55 as the Nasdaq edged higher. Palantir stock was on the verge of recording a second consecutive weekly loss, but the shares rebounded to end the week up nearly 6%, according to IBD MarketSurge.
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Friday's rally capped a rollercoaster ride for the tech giant's stock amid a growing chorus of downbeat views about Palantir's valuation.
Palantir had rallied Thursday after announcing a major U.S. Army contract extension, but tumbled early Friday. UBS analyst Karl Keirstead initiated coverage of Palantir with a neutral rating and 80 price target. Keirstead said he had "a very positive view" of Palantir's fundamentals given the company's strong position in AI.
"Customers and other checks were almost all bullish on Palantir's model," Keirstead wrote in a Wednesday note.
But estimates for Palantir were "simply too high a hurdle to get over, and we don't mind staying patient for a better entry point," he added.
That view was echoed by William Blair analyst Louie DiPalma, who reiterated an underperform rating on Palantir stock saying, "Risks to the upside include momentum, optimism associated with the new Trump administration, and the impact of artificial intelligence on Palantir's business."
Last week, Baird analyst William Power also warned against chasing Palantir stock gains. He noted shares have outpaced the S&P 500 big time, "suggesting high expectations, though we also acknowledge the strong, accelerating operating momentum."
Palantir stock was still trading above its 21-day and 50-day averages, according to IBD MarketSurge. The shares maintained a perfect 99 Relative Strength Rating. The stock was up more than 300% year to date.
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