Palantir Stock Stuck At Recent Trading Range As Valuation Concerns Offset Optimism Over Fundamentals: Retail Guarded

Palantir Technologies, Inc. ($PLTR) shares are poised to bounce back from Wednesday's Federal Reserve-induced sell-off. The stock rose 2% in premarket trading, but retailers remained on the sidelines. 

Late Wednesday, UBS initiated coverage of the stock with a ‘Neutral’ rating and a $80 price target, TheFly reported. The firm’s one-year price target offers scope for about 12% upside potential from current levels.

UBS analysts said the firm’s 2025 and 2026 estimates for Palantir are well above the consensus. The firm is also positive about the artificial intelligence-enabled data analytics company’s fundamentals. 

The analyst said Palantir stock is currently trading at 49 times its revenue and 124 times free cash flow on 2025 estimates, adding that the valuation is “simply tough to get over.”

Citing customer checks, the firm said Palantir’s fundamentals are positive. It added that the Alex Karp-led company is a key AI data winner.

Palantir is the best-performing S&P 500 stock this year, with the year-to-date gains at 316%. 

PLTR sentiment and message volume December 9, 2024, premarket as of 9:22 am ET | Source: Stocktwits

On Stocktwits, sentiment toward Palantir stock remained ‘neutral’ (54/100), with message volume at ‘normal’ levels.

The overbought levels of the stock caused uneasiness among some retailers.

On the other hand, few think the worst is behind. Reasoning that the S&P 500 will rally into the year-end, a user said Palantir is a great stock to own.

In premarket trading, Palantir stock was up 3.50% at $74.01 as of 9:22 a.m. ET. Making sense of the move, CNBC Mad Money host Jim Cramer said overnight buyers are sending the stock higher on light volume very early in the premarket session. 

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