Palantir Technologies' Shares Have Dropped Over 25% from Their Peak. Could This Be the Opportune Moment to Purchase at a Discount?
It seemed like Palantir Technologies (PLTR -3.08%)) was unstoppable, soaring as much as 1,250% in the past two years. But lately, investor sentiment has turned sour. The stock plummeted 11.9% on Monday, leaving it down 8.1% as of 1:38 p.m. ET. Over the past five days, Palantir has lost about 25% since hitting a new all-time high early last week.
So, is now a good time to buy the stock?
Rain, Rain Go Away
A couple of factors are contributing to Palantir's woes. First off, CEO Alex Karp announced plans to sell 9,975,000 shares of stock using a 10b5-1 trading plan. This would have netted him as much as $1.24 billion on the day before the stock decline began. While Karp's stock-based compensation is a significant part of his pay, this sale might have given some investors pause.
PLTR
Secondly, Defense Secretary Pete Hegseth reportedly plans to slash defense spending by 8% annually over the next five years. If Hegseth follows through on these plans, it could hurt Palantir, as the company is a major supplier of data mining and AI systems to U.S. intelligence and defense agencies.
Buy or Sell?
There's no clear consensus on Wall Street when it comes to Palantir. Four analysts rate it a buy or strong buy, while 14 say hold, and five label it underperform or sell.
artificial intelligence (AI) software and data mining specialist has lost roughly 25% over the past five days since reaching a new all-time high early last week. After such a precipitous drop, is it finally time to buy the stock?
Despite the high valuation of Palantir's stock, the company's significant opportunity in AI can't be denied. Palantir still sells for 167 times next year's expected earnings. So volatility remains a possibility. Those who want to buy might want to consider dollar-cost averaging.
Sources:
- Palantir Technologies Q4 2021 Earnings Call Transcript
- Palantir Reports Strong Q4 Earnings and Revenue
- Is Palantir Technologies Stock a Buy or Sell Now?
- Palantir Co-Founder Peter Thiel Is Selling His Shares in the Company
- Palantir's Commercial Business Gains Momentum
dollar-cost averaging.
- Despite the recent stock collapse of Palantir Technologies (PLTR), some investors might be interested in utilizing dollar-cost averaging when considering a purchase, considering the company's significant opportunities in AI.
- It's surprising to see that despite the 11.9% plunge on Monday and the 25% loss over five days, Palantir Technologies' stock still has a high valuation of 167 times next year's expected earnings.
- If Defense Secretary Pete Hegseth follows through on his plans to cut defense spending by 8% annually over the next five years, it could potentially impact Palantir, given the company's substantial involvement in U.S. intelligence and defense agencies.
- Investors might have been taken aback by CEO Alex Karp's announcement of selling 9,975,000 shares of stock using a 10b5-1 trading plan, which could have poured cold water on investor sentiment and contributed to the recent stock decline.