Palantir Technologies, Inc. (PLTR:NYSE)
Price at Preparation: $29.38 (August 12th, 2024)
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What they do
Palantir Technologies, Inc. (PLTR:NYSE) engages in the business of building and deploying software platforms that serve as the central operating systems for its customers. It operates in the following areas:
- Commercial: Focusing on customers working in non-government industries.
- Government: Providing services to customers that are the United States government and non-United States government agencies.
Welcome to Theta Bandits Top Pick Tuesday. We strive to bring you relevant free content, searching markets and making plans to be ahead of what we think could be new potential winners in any portfolio.
Opinion
Palantir Technologies, Inc. (PLTR:NYSE) has made the list this week, but not for the reasons you might think – We consider this company to be another way to play the AI trend. Traditionally those picks have been reserved for the likes of Nvidia (NVDA:NASDAQ), Microsoft (MSFT:NASDAQ) or Alphabet (GOOG: NASDAQ) which are dealing with building either chipsets used for the computation or building the Learning Language Models (LLM) and typically the infrastructure or base for what is considered AI. What is missing from this is a “use case”, which uses this infrastructure to build upon and create solutions. This is where Palantir comes in as a use case for AI. Beating their quarterly earnings report (ER) last week and signing a deal with Microsoft for the use of their Azure platform in their toolset to provide data analytics solutions is a big win and has seen their stock rise in the last week.
In the last four quarterly ERs Palantir has not missed their targets and seen spikes three out of four ERs. Since the last ER was recent, coupled with the news of the deal mentioned above, this gives confidence of a high probability for Palantir to move up on their stock price to the higher end of the current analyst targets. The chart below shows the current street consensus with 9 Buys, 6 Holds, 8 Sells and the 12-month Price Targets (PT) as follows:
- Low: $9.00 USD (-69.37%)
- Average: $24.63 USD (-16.17%)
- High: $38.00 USD (+29.34%)
Plan
As usual, find the visual aid below with following colors:
- Blue: 52-week high.
- Red: 52-week low / cut line.
- Green: 12 Month PTs.
- Orange: Support/resistance lines.
- Yellow: Our plan targets.
Finding the trading opportunity is the key for this trade as we can see the stock price has already made a nice gain, recently making a new 52-week high. We do believe that the AI trend is here to stay and that this is just the beginning. However, there might be some volatility along the way. In all trading mitigating risk is necessary so trade according to your risk profile. It is always prudent to secure profit and set / adjust stop-losses as the price moves.
We have a support/ resistance line which the stock price is on the cusp of right now at $30.19 USD. Breaking through this could see our target zones of $33.42 USD, $36.60 USD and finally $38.00 USD. However, if the price fails to break this resistance line and retraces downward, we have identified two supports down as a potential cut zone at $26.58 USD. At this point there would be a potential for the price to come down to the $20.66 support line, which is a strong support as on the chart shows the price hitting this line multiple times but unable to fall past it. This might be a good re-entry point if the price bounces off the support line at that price point.
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RISKS
The goal is to grow capital by securing profits along the way and limiting losses. Make sure to plan to trade within your risk tolerance, allowing time for success while updating limits and exit points to mitigate risk.
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Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
