Amidst a market-wide downturn, Palantir stock (NASDAQ: PLTR) crashed below $100 in late February.
Despite a string of promising earnings quarters, the data analytics company is in a precarious position. It’s trading at an extremely high valuation, even relative to software peers — in the middle of a market downturn. In addition, with so much growth already priced in, investors are either locking in their profits or waiting for a more attractive entry point for a long position.
Exactly 1 month ago, PLTR shares were trading at an all-time high (ATH) price of $124.62. By press time on March 19, the price of Palantir stock had receded to $85.94, marking a 31.04% drop from the ATH.
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Readers should note, however, that on a year-to-date (YTD) basis, PLTR stock is still up roughly 13.74%. It seems that even those gains could soon be erased — as data suggests that the short-sellers smell blood in the water.
Palantir stock surge unlikely to continue with consistently strong short volume
First, let’s backtrack a tiny bit and deal with more recent price action. On March 12 and March 13, Palantir stock surged.
Two key catalysts drove the rally. The delivery of two Tactical Intelligence Target Access Node (TITAN) trucks to the U.S. Army was the first. This was bolstered by the company’s Artificial Intelligence Platform Conference (AIPCon), which unveiled a slew of new high-profile customers, including the likes of Heineken, Walgreens, and Delta Air Lines.
Despite this bout of optimism, it remains an open question as to whether or not the rally will continue. For the past two weeks, the short volume ratio of Palantir stock has been at quite high levels, mostly staying above 65%, per market intelligence platform Fintel.
To boot, company insiders have been on a selling spree since the start of the year. Most recently, Stephen Cohen, the company’s President and Co-founder, sold roughly $310 million worth of Palantir stock on March 12. In addition, Chief Executive Officer (CEO) Alex Karp is slated to dump as many as 9,975,000 PLTR shares by September 12, 2025.
While most Wall Street analysts have remained conspicuously silent regarding recent developments, most of the recent coverage revisions made by researchers have seen price cuts. Jefferies analyst Brent Thill recently reiterated a $60 price target for PLTR stock, which implies a 30.18% downside. Thill expects PLTR shares will be range-bound for the remainder of the year.
Once everything is said and done, in uncertain macro conditions such as these, waiting for a more attractive entry point might be the most prudent choice, as the data analytics company’s long-term prospects remain intact.
Featured image via Shutterstock
