What Happened:
Shares of data-mining and analytics company Palantir (NYSE:PLTR) fell 5.8% in the morning session after Monness analyst downgraded the stock's rating from Neutral to Sell and assigned a $20 price target, highlighting the company's "rich valuation." The price target implied a potential 13% downside from where shares traded when the downgrade was announced.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Palantir? Access our full analysis report here, it's free.
What is the market telling us:
Palantir's shares are very volatile and over the last year have had 38 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago, when the stock gained 9.1% on the news that the company announced that it had been awarded a $178.4 million contract by the Army Contracting Command – Aberdeen Proving Ground for the development and delivery of the Tactical Intelligence Targeting Access Node (TITAN) ground station system.
According to the press release, the agreement covered the development of "10 TITAN prototypes, including five Advanced and five Basic variants. The system is expected to have AI and machine learning capabilities to "enhance mission command and long-range precision fires by providing actionable targeting information sourced from various sensors."
Overall, the announcement highlights the growing demand for Palantir's artificial intelligence platform and the strength of its capabilities within the government vertical.
Palantir is up 39.7% since the beginning of the year, but at $23.17 per share it is still trading 12.4% below its 52-week high of $26.46 from March 2024. Investors who bought $1,000 worth of Palantir's shares at the IPO in September 2020 would now be looking at an investment worth $2,439.
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