Palantir Stock Forecast: With PLTR up 55% on month, can May rally continue?
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- PLTR stock has risen 55% over the past month.
- Investor Cathie Wood has purchased PLTR across her Ark Invest ETFs.
- Palantir’s relationship to artificial intelligence has also buoyed the stock.
- Palantir stock formed a bullish Golden Cross pattern on the daily chart in early April.
Palantir (PLTR) stock has run up 55% over the past month after the market’s excitement over first quarter earnings and the related euphoria for all things artificial intelligence (AI). Palantir’s big data platform for militaries, governments and corporations utilizes AI, hence the excitement as other AI-linked stocks like Nvidia (NVDA), C3.ai (AI) and Upstart (UPST) have all benefited in recent weeks.
After two straight weeks of more than 20% gains, Palantir stock is up 7.9% so far this week but down nearly 3% in Wednesday’s premarket. The pullback mid-week is primarily due to pessimistic remarks from House Speaker Kevin McCarthy on the debt-ceiling negotiations in Washington.
Palantir stock news: Cathie Wood adds to PLTR frenzy
Palantir stock had languished down near its IPO reference price for much of the past year after dropping more than 80% from its all-time high of $45 in January of 2021. That all changed on May 8, when Palantir released its first-quarter results. PLTR stock gapped up, consolidated for a week around $10, and then shot up over the past week to close at a 13-month high on Tuesday at $12.64. That price level has not been reached since April 2022.
Investor Cathie Wood has helped to invigorate the rally this week. A long-time supporter of Palantir, Wood’s once-meteoric Ark Invest family of ETFs announced large buys this week. It is uncertain what made her team plough back into the stock more than a week after earnings, but its Ark Innovation ETF announced the purchase of more than 240,000 shares on Monday, its Ark Fintech ETF bought more than 54,000 shares, and its Ark Next Generation ETF acquired more than 42,000 shares. Wood is still a much-followed investor in tech and growth stocks, and so her purchases are closely followed by retail traders.
Palantir CEO Alex Karp impressed the market with first-quarter results when he said that the data mining firm should be profitable all year. Until then, many analysts expected slight losses as the company focuses on driving revenue growth. However, revenue came in $19 million, or about 4% ahead of analyst consensus in the first quarter, so the market has drawn from this that profits and strong revenue growth can now be won in tandem.
Still, debt talks in Washington are beginning to hold back equities this week, with NASDAQ 100 futures down 0.4% before the bell. Likewise, many in the market will wait to enter until FOMC minutes arrive at 18:00 GMT.
Palantir has billions of dollars worth of US government, especially military, contracts that could get cut, postponed or face late payments if US legislators cannot agree to raise the debt limit in the next few weeks. Additionally, a debt compromise could result in major cuts to federal spending that lead to lowered guidance at Palantir.
Palantir stock forecast
Palantir stock has already reached a strong resistance band that stems from January and February of 2022. It ranges roughly from $12 to $14. The past two weeks have seen long wicks on the weekly chart once price action advanced into this region. A break of $14 will allow bulls to make a run at the April 2022 high of $14.86.
PLTR weekly chart
A close above that price could spur an attack at the $19 resistance level, which can be seen on the daily chart below. That level put a ceiling on price action during a long spell of consolidation in December of 2021.
A Golden Cross formation – when the 50-day moving average crosses above the 200-day moving average – commenced in early April and seems to have given the first glimpse that a rally was in the cards.
Still, the debt standoff in Washington, and especially if the US defaults on Treasury payments in June, could choke off any optimism in the market over the coming weeks. If this leads to a market exodus, then any pullback from this point in PLTR stock should coalesce around the August 2022 high at $11.62.
PLTR daily chart
