Palantir Stock Takes a Hit: Is it a Buy Now?

Palantir's stock is plummeting due to concerns about inflation and skepticism about the return on investment for AI companies. Despite being up 93% this year, the stock is heavily valued at 221 times expected earnings and 78 times expected sales. Investors with a high risk tolerance and long time horizon may still see wins, but unfavorable inflation and interest rate developments could lead to a better buying price.

Palantir Technologies (PLTR) stock has been facing significant volatility and a sharp decline in recent days, driven by concerns over inflation and skepticism surrounding the long-term returns of AI companies. Despite impressive year-to-date gains of 93%, the stock has plummeted, trading at 221 times expected earnings and 78 times expected sales [1].

The latest earnings call for Palantir highlighted robust revenue growth and expanding customer accounts, with Q2 earnings reaching $1 billion, surpassing analyst expectations. However, challenges such as international commercial revenue declines and strategic contract declines were also noted [1]. Despite these mixed signals, traditional analysts maintain a Hold rating with a price target of $154.56, implying a 5% downside from current levels [1].

In contrast, TipRanks’ A.I.-driven forecast remains bullish, projecting a 19.5% upside from current levels. The A.I. Stock Analysis tool rates Palantir with a solid score of 76 out of 100 and an Outperform rating, reflecting strong financial performance and positive earnings call sentiment [1].

Wall Street, however, remains cautious. Analysts point to the stock's high valuation and volatile trading as key risks, keeping most ratings at Hold. Geopolitical developments, such as potential resolutions to the Russia-Ukraine war and improving relations between the U.S. and China, have also contributed to the stock's decline [2].

Investors with a high risk tolerance and long-term horizon may still find opportunities in Palantir, but the current unfavorable inflation and interest rate developments could present a better buying price. The Motley Fool Stock Advisor team, however, did not include Palantir in their top 10 stocks for investors to buy now [2].

References:
[1] https://www.tipranks.com/news/palantir-stock-pltr-forecast-ai-analyst-stays-bullish-despite-wall-street-skepticism
[2] https://finance.yahoo.com/news/why-palantir-stock-sinking-today-162212151.html