Why Palantir (PLTR) Stock Just Hit a New 52-Week High


  • Shares of Palantir (PLTR) stock are once again on the move higher today, making a fresh 52-week high.
  • Demand for this high-profile AI-related stock remains high, as investors look for any way to play this trend.
  • At its current valuation, Palantir is starting to look pricey, but its momentum clearly remains strong.
PLTR stock - Why Palantir (PLTR) Stock Just Hit a New 52-Week High

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Stocks are moving broadly higher today, with many high-growth artificial intelligence (AI) names leading the charge. Among today’s top movers is Palantir (NYSE:PLTR) stock, which is up 2.3% in early afternoon trading, hitting a fresh 52-week high in today’s session.

This move comes as notable other AI stocks see sharp surges higher today amid analyst upgrades and improving sentiment across the board.

Investors are awaiting congressional testimony from Federal Reserve Chairman Jerome Powell later this week, as well as additional economic data set to be released. For now, the market appears to have moved away from being interest rate and Fed-driven. Certain trends, such as AI, remain robust and are driving significant demand for certain stocks. Palantir is lucky to find itself among a key handful of companies driving the market higher today.

Let’s dive into this broader trend and what to make of today’s price action.

PLTR Stock Surges to Fresh 52-Week High

Palantir is certainly a company with plenty of momentum. The company’s various AI integrations and product launches have been a hit with its core government clientele as well as its booming enterprise business. The market is clearly pricing in plenty of growth from the latter group, judging by the company’s now very inflated valuation multiples.

At the time of writing, Palantir trades at more than 230 times earnings and a price-sales ratio of 27 times. That’s extremely expensive. And while the company has produced a series of positive quarters in terms of earnings, it’s clear Palantir will need to step on the gas in terms of improving its margins to make these valuation multiples make sense for many investors.

Some appear to be viewing Palantir as an AI beneficiary with the kind of operating leverage Nvidia (NASDAQ:NVDA) and other pure-play AI stocks have shown. If that’s indeed the case, perhaps today’s valuation makes sense. But it’s important to keep in mind that momentum can work in both directions, making this recent rally one that could be worth watching closely for those looking to trade this stock or invest over relatively short time horizons.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor held a LONG position in NVDA.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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