Sticking With This Palantir Price Target, My Favorite Trade in 40 Years
The AI darling has forced me to do something I've never done as it becomes an indispensable U.S. defense name.
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I have a number of hot stocks all running for me at this time. I've been fortunate.
I could pick Rocket Lab RKLB. As I write, we're up 349% on that one. I could pick SoFi Technologies SOFI. We're up 143% on that one. Those two are almost like children to me. That said, they pale in comparison to the greatest trade I have made in my now almost 40-year career as a professional trader and almost 50 years since I started trading.
Everyone has now heard of Palantir Technologies PLTR. Big data. Cloud software security provider. AI platform. Probably one of the real winners when it comes to monetizing their AI services platform. The firm has made itself indispensable as a U.S. and allied defense contractor, and to non-defense government agencies and the corporate world as well. I keep waiting for someone else to compete effectively in this space. I once thought perhaps Snowflake SNOW would be the one, but still, as far as I can tell, nobody is even close.
Every year, at TheStreet Pro, we are asked to name our stock of the coming year just ahead of New Year's Day. I had over the years named a couple of winners. I had also named a couple of real clunkers. For 2024, I named Palantir. The stock was up 361% for that calendar year. For 2025, I did something I had never done before. I named the same stock for a second straight year. Year to date, as I write this piece, PLTR is up 85% for 2025 despite now working off of a much higher base.
The truth is that I had initiated PLTR for the old Real Money Pro "Stocks Under $10" portfolio and have been long the name either in that now defunct portfolio or for my own account ever since. From the time I initiated PLTR for Real Money Pro (now TheStreet Pro), PLTR is up a mere 2,192%. Rock and roll, kids. Just for the record, I still get fired up about 10% and 20% gains in the stocks I trade.
That's Great Sarge... What Now?
Don't forget that NATO's 2025 Summit wrapped up from the Hague in late June. NATO members approved an increase in defense spending for member nations to 5% of GDP. Only Spain opted out. Readers may recall that it was only about eight years ago that President Trump could not get the majority of these nations to pay their fair share, which was then mandated at a mere 2%. Funny how having a hostile Russian military knocking at NATO's door has changed perceptions of what is necessity and what is not.
Those nations that are geographically closer to Russia have enthusiastically embraced that new 5% target with several actually surpassing it. Only Spain and Canada seem less than enthusiastic about having to actually help fund their own defense. Spain has the luxury of existing in extreme Western Europe and Canada the luxury of living next door to the toughest kid in the neighborhood.
What finally becomes of these pledges? There will, of course, still be costly purchases of expensive military hardware. Tanks, artillery, aircraft, naval craft, missiles and missile defense technology will all be in demand, though some of those technologies might have something in common with yesterday's roast beef. Intelligence produced through data-based, AI-assisted analysis will only grow in significance. Not just for strategic purposes, but because it is cost-effective relative to purchasing submarines and fighter aircraft.
This plays straight into the hands of a firm like Palantir. These nations have pledged to up-spend on defense, yet most of them are also fiscally strapped. They, in my opinion, are going to spend where they get the most bang for their expense
The Charts
Some readers have seen this chart before. It's still valid. The stock continues to break out from the bullish cup-with-handle pattern that we had drawn up this past spring. Relative strength remains strong, but incredibly is still not technically overbought. The daily MACD is once again postured bullishly. The histogram of the nine-day EMA that is now back above zero. In addition to that, the 12-day EMA is back above the 26-day EMA with both still in positive territory.
Zooming out a little, we can place a Raff regression model over the stock's activity going back to last summer to illustrate the trend. The stock has been riding its 21-day EMA since mid-April. The trend, as they say, is your friend. The current pivot is the upper trendline of the model (about $157). Our current target is the high target on Wall Street and as usual most of Wall Street is still playing catchup. Dan Ives of Wedbush increased his target from $140 to $160 last week.
Palantir Technologies (PLTR)
Target Price: $181 (Reiteration, high on Wall Street)
Pivot: $157 (upper trendline of regression model)
Add: Down to 50-day SMA (currently $130)
Panic: Loss of 200-day SMA (currently $89)
At the time of publication, Guilfoyle was long PLTR, SOFI and RKLB equity.
