Palantir Technologies (NASDAQ: PLTR) appears poised for another leg higher as technical signals indicate the stock is sitting in a strong buy zone.
Notably, backed by its role in the artificial intelligence sector, Palantir has been on a bullish run, with the $200 resistance remaining elusive. Year-to-date, PLTR stock has rallied 144%, ending the last session at $184.
PLTR stock fundamentals
Regarding the stock price outlook, analysis by TradingShot in a TradingView post on October 24 stressed that the bullish call toward $220 is based on the fact that since early May, Palantir has been trading within an ascending “channel up” pattern, forming consistent higher lows.
The stock is currently hovering around $180, supported by the one-day moving average (MA) at $180.50 and the four-hour moving average at $183.50. TradingShot noted that this narrow range between the two averages has historically represented the most favorable buy zone within the channel.
Momentum indicators also support a bullish outlook. The four-hour Relative Strength Index (RSI) is forming a bull flag pattern similar to the one seen between May and June, a setup that previously triggered an 80% rally.
TradingShot’s projection pointed to an initial upside target of $220, aligning with the 2.618 Fibonacci extension level. Should Palantir break above that threshold, the analysis anticipates a potential continuation toward $255, marking an additional 80% bullish leg within the channel.
Palantir stock fundamentals
Beyond technicals, Palantir’s fundamentals have also been strengthening. In the second quarter, the company surpassed $1 billion in revenue for the first time, marking a 48% year-over-year increase.
U.S. government contracts remained its largest revenue stream at $426 million, up 53% from the previous year. Meanwhile, its commercial segment grew even faster, surging 93% to $306 million, fueled by accelerating demand for Palantir’s artificial intelligence and data-analytics platforms.
The firm also closed 157 deals worth at least $1 million each during the quarter, underscoring the widening adoption of its software.
However, the stock’s meteoric rise has sparked debate over its valuation. Palantir’s share price has soared more than 2,100% over the past three years, pushing its forward price-to-earnings ratio to 217 and its price-to-sales ratio to 137, levels that many analysts view as unsustainably high.
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