New Palantir Price Target as Stock Falls From Grace
As the generative AI bubble has run its course, Palantir shares are looking for some support.
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In defense of Palantir PLTR.
Yup, I'm the guy who made the Palantir Technologies call when it was trading with a $6 handle. Fortunately, I make sales at target prices when they are breached and try to add those portions back on when possible. While that has had the effect of increasing my net basis over time, it has also allowed me to extract capital as the stock had risen to heights I had never imagined back when I was running TheStreet Pro's "Stocks Under $10" portfolio.
While the next industrial revolution driven by generative AI is probably alive and well, as the nation and financial markets prepare for an economic rough patch and some fiscal austerity, the AI-created asset bubble appears to have run its course.
About a week and a half ago, I reiterated my $133 target price for PLTR. Yeah. Palantir may hit $133 at some point, but obviously, even if the stock started to put something constrictive together right now, this is no longer a valid target. The $125.41 high of February 19, which was an awful day for the stock, will be the stock's all-time high for at least a while.
Recent Palantir Stock Moves
On the way down, as advertised, I made some sales of PLTR with a $111 handle, and bought back those shares and more at $106, $102 and $96 on the way down. Then, I made some sales in the $91s and bought those back in the $85s and $84s, again adding more than I had sold. On Friday morning, ahead of the opening, I grabbed a few shares with a $79 handle.
Not the worst trading in the world. Certainly not the best, but at least I did not just stand there and not defend myself. However, all of this trading, on a FIFO (first in, first out) basis, has taken the net basis for my current position up to $46.44. After the stock had run 1,800% from my initial call and I had taken profits as high as 594% just since mid-February, my current position is up just 74%.
That said, that is how one protects oneself and one's profits. Hope is not a strategy. Algorithms react when a CEO decides the time has come to take (more) profits on a chunk of shares or when a major client of said firm, the U.S. Department of Defense, looks to cut costs.
Earlier this week, Morgan Stanley's Sanjit Singh, who is rated at three stars by TipRanks, reiterated his "buy" rating on the stock, while increasing his target price to $115 from $95.
Readers May Recall...
Last week, at the start of this sell-off for my favorite stock (I pointed this out in an earlier piece), five-star rated (by TipRanks) analyst Mark Schappel of Loop Capital initiated coverage of Palantir with a "buy" rating and a $141 target price.
Loop, who relieved me of the distinction of having the high target on Wall Street, noted that Palantir provides a modern AI data platform that helps both government agencies and enterprises make data-driven decisions by detecting unusual or previously undetectable patterns in large complex datasets. The firm's ontology presents data to users in their own everyday terms and represents decisions in an enterprise. This makes the firm's platform a powerful tool for AI-driven decision-making.
Around that same time, well-known and closely-followed Wedbush analyst Dan Ives, who is rated at 4.5 stars by TipRanks and also rates PLTR as a "buy" with a $120 target, placed two posts on social media.
First, Ives wrote, "DeepSeek sell off for Nvidia NVDA a few weeks ago is this Pentagon worry sell off for Palantir. It’s noise and creates the oppy (opportunity) in our view. Very simply DOD budget cuts and more focus on efficiency bullish for PLTR…not a headwind. They will GAIN more share of DOD budget dollars."
Then, Ives posted, "This Palantir sell-off is the bears trying to poke holes yet again in a transformational AI story that is getting stronger by the day. More focus on efficiency for the government between DOGE and DOD budget cuts is bullish for PLTR given where they play in the Beltway."
Palantir Stock Charts
The stock's precipitous fall from grace has completed development of a head-and-shoulders pattern, which is bearish, with an $84 downside pivot (neckline). Relative strength has eased up a bit but is still not technically oversold. The daily MACD has gone to the dark side with the histogram of the nine-day EMA now well below the zero bound and the 12-day EMA running below the 26-day EMA.
I had said that I would back up the truck at the fill of the post-earnings gap up in early February. I did buy some, I did not back up the truck as I was getting run over. Where is support? Well, the 200-day SMA lives at $49 and nothing is impossible. The start of this head-and-shoulders pattern would put the shares at $63. Now, if one wants to get really scared...
There is a much bigger and badder head-and-shoulders pattern out there. However, to complete the pattern could run into the firm's next earnings release which will be in early May. Ten of 10 analysts have increased their estimates for the current quarter since it started and we're looking for sales growth of about 38%, so there is a very good chance for an upside catalyst by then. I am not yet going to worry about this "bog creature" just yet.
Palantir Technologies (PLTR)
Target Price; $115 (down from $133)
Pivot: $100 (gap fill from February 24)
Add: Down to $63
Panic: Loss of 200-day SMA.
At the time of publication, Guilfoyle was long PLTR equity.
