Palantir: The mysterious big data analysis company, can its stock price continue to break through? (July 10, 2024).

Hello everyone, in this week's [Technical Tracking], let's analyze Palantir, the most mysterious big data analysis company in Silicon Valley and one of the hottest artificial intelligence (AI) concept stocks. $Palantir(PLTR.US)$Although investors can dig out high-quality individual stocks by themselves, investing only in one stock may be very risky. It is best to achieve risk diversification by covering enough small-cap stocks and enough industries.

Hot events

On Wednesday, July 10, 2024, the Palantir stock price closed up 3.76%, once again breaking a new 52-week high, and also expanding the year's increase to 65%. As Palantir continued to strengthen, the AI sector continued to soar, leading the U.S. stock market to repeatedly hit new highs.

Palantir is known for serving military and intelligence clients, and its most famous case is using big data to help the U.S. military successfully locate and assassinate Al Qaeda leader Osama bin Laden. In the AI wave, Palantir's AI technology and products not only consolidate government institution orders, but also help develop its business. With AI investment opportunities gradually shifting from hardware to software, Palantir also received special attention from Wall Street.

However, some market observers believe that Palantir's business lacks transparency, like a "giant black box", and questioned its high valuation.

Data shows that Palantir's current P/E ratio is over 230 times, and its P/S ratio is as high as 27 times, far beyond normal valuation levels. Although Palantir has good growth potential and has achieved consecutive profits in recent quarters, there is no doubt that the company needs to significantly improve its profit margin to digest such a high valuation.

On the other hand, the bulls believe that Palantir's high valuation is supported because the company has the ability to continue to obtain government orders, and AI has further stimulated its growth prospects.

Wedbush analyst Dan Ives believes that the "AI party" has just begun, and thanks to Palantir's huge deployment of its software platform, the stock is expected to ride the wave of this AI boom and become one of the big winners.

Technical analysis

Trend analysis:

In the past 12 months, Palantir's stock price has been generally upward. In March of this year, the stock touched a phased high of $27.50. In the following months, the stock price remained volatile at a high level, and the lowest fell to $20.33. However, in recent trading days, the stock price has continuously broken through the new 52-week high, indicating that the market seems to be pushing for a new upward trend.

Indicator interpretation:

● In the past month, Palantir's moving averages (MA) have shown a bullish arrangement, that is, the trend of the main moving averages is upward, and the shorter-term moving averages are above the longer-term moving averages, which is a positive bullish signal.

● Looking at the trading volume, although the stock price has broken through the new 52-week high, compared with previous phased highs, there is no obvious "volume-price rise", indicating that buying power is somewhat lacking.

● The RSI indicator has repeatedly tested the overbought boundary of 70 in a short period of time, indicating that the market is somewhat hesitant and the market faces certain selling pressure.

Focus direction:

Overall, following Palantir's stock price breaking its 52-week high, there are no obvious resistance levels above, but there may be pressure from profit-taking by the bulls. In addition, as a potential beneficiary of AI, Palantir's short-term trend will likely be dominated by market sentiment towards AI.

For investors who want to capture the potential timing of a pullback in Palantir's stock price, they can closely observe the RSI and other overbought/oversold indicators, and judge based on trading volume.

This content discusses technical analysis. Other methods, including fundamental analysis, may provide different perspectives. The examples provided are for illustrative purposes only and do not reflect expected results.

All investment involves risk, including the potential loss of principal, and no investment strategy can guarantee success.