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Palantir Technologies Inc. (PLTR) is having a volatile Wednesday. The stock initially gained in early trading, then turned red, reflecting the market's mixed feelings after the company's upbeat second-quarter results on Monday. While the numbers were stellar, not everyone is convinced the rally is sustainable.
Nasdaq futures are up 0.47%, and S&P 500 futures have gained 0.60%, suggesting a generally positive market tone. But Palantir's moves are anything but calm.
The company reported second-quarter revenue growth of 93% year-on-year to $1.94 billion, with adjusted earnings of 41 cents per share, easily topping consensus estimates of 30 cents. That's a massive beat, and it's driving the bullish narrative.
DA Davidson analyst Gil Luria reiterated a Buy rating and raised his price forecast from $175 to $200. Revenue beat expectations by approximately $136 million, with U.S. clients contributing 38 of 44 new customers. Luria wrote, "Palantir has several competitive advantages over all other software companies, which is becoming more pronounced in the era of AI, helping the company provide guidance substantially above expectations."
On the flip side, investor Michael Burry, famous for "The Big Short," stated in a Wednesday Substack post, "I continue to believe it is possible we are near a major top, and possible a 1987-type fall," while holding short positions in Palantir and Tesla Inc. (TSLA). That's a stark contrast to the analyst optimism, and it adds a layer of uncertainty to the stock's trajectory.
Technically, Palantir is stretched. The stock is trading 25.6% above its 20-day simple moving average (SMA) of $130.12 and 7.1% above its 200-day SMA of $152.54. That tells you the recent run has been fast, even by its own standards.
The Relative Strength Index (RSI) is at 72.74, which is in overbought territory. That's a classic signal that the stock might be due for a pullback, though overbought conditions can persist in strong trends.
One nuance: the longer-term moving-average structure still carries some baggage. The 50-day SMA is below the 200-day SMA, a "death cross" that occurred in February. In other words, the near-term price action is strong, but the longer-term trend repair is still in progress. Traders will likely watch whether dips hold above the 200-day area rather than slicing back through it.
PLTR Price Action: Palantir Technologies shares were up 0.24% at $163.05 at the time of publication on Wednesday, according to market data.
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