Move over Nvidia (NVDA). Data analytics firm Palantir (PLTR) is the top-performing stock in the benchmark S&P 500 index so far this year.
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Through six weeks of the trading year, PLTR stock has risen 54%, making it the best performer in the S&P 500. Fueled by strong financial results and bullish forward guidance, PLTR stock has steadily risen, outpacing the other 499 securities in the index. Over the past 12 months, Palantir’s share price has now gained 365%.
The continued rise in PLTR stock comes despite widespread criticism on Wall Street, where analysts warn that the shares are too richly valued, trading at more than 600 times future earnings estimates. Palantir’s stock is also rising on hype surrounding artificial intelligence (AI) that could provide a further boost to the company’s business, which is primarily focused on government and defense contracts.
Cult-Like Following
Some analysts have gone so far as to say that PLTR stock has developed a cult-like following among retail investors who are ignoring the fundamentals behind the share price. At the same time, Palantir’s stock has attracted growing interest from short sellers, who are placing bets that the share price will decline from its current height.
Still, bullish investors point out that Palantir has surpassed consensus forecasts for its financial results over the last few quarters, forcing analysts to continuously raise their earnings estimates as a result. The strong earnings and revised estimates make it more difficult to gauge what PLTR stock should be worth.
Is PLTR Stock a Buy?
Palantir Technologies stock has a consensus Hold rating among 17 Wall Street analysts. That rating is based on two Buy, 10 Hold, and five Sell recommendations issued in the last three months. The average PLTR price target of $88.60 implies 24.05% downside risk from current levels.
