Palantir (NAS100:PLTR) stock remains a key market leader following the latest earnings, which impressed analysts.
PLTR – Daily Chart
The PLTR price was facing resistance near $160 but has blown higher and now looks to $200 as the next target.
Palantir has been one of the hottest stocks in the U.S. tech market over the last two years and also saw a strong rally from the April lows. The company released earnings last week, which added to the recent rally, but investors are now trying to defend the high valuation.
Citi analysts were confident that the AI firm can continue to show strong results in its commercial and government contracts.
“We are constructive on commercial fundamentals…,” analysts said, but added, “While the acceleration in government has been impressive, the second half growth has a tougher job to convince investors”.
“We continue to see strong AI government demand with Palantir signing a five-year $100 million contract with The Nuclear Company and contracts with the U.S. Navy (partnered with Anduril)”.
The company now trades at 245 times forward earnings, which makes it the most highly valued company in the S&P 500. Nvidia was another key stock in the market rally, but it trades at 35 times forward earnings.
Palantir will find it harder in each earnings release to justify that valuation, and it also highlights a lot of downside risk if the market turns against the bullish AI theme.
