- Palantir stock trades up to highest price in two years.
- Stock market indices started Friday on the backfoot.
- Peter Thiel’s venture capital fund sold $48 million worth of PLTR in Q3.
- Analyst Dan Ives says tech stocks are at the beginning of a new rally heading into 2024.
Palantir (PLTR) stock rose above $20.24 – the high from August 1 – on Friday as the artificial intelligence (AI) company attempts to finish off its third straight week of gains. This is the highest level that PLTR stock has traded at since November 2021. PLTR stock progressively rose throughout the session to more than 3%, reaching an intraday high of $20.45.
The broad market opened slightly lower as the market digests Thursday’s pullback and consolidates within the significant gains achieved on Tuesday and Wednesday. All three indices – the S&P 500, the Dow Jones and the NASDAQ Composite – are down less than 0.1% at the time of writing.
Palantir stock news
Much of the news surrounding Palantir at the moment stems from hedge funds and family offices filing their 13Fs for the third quarter with the Securities & Exchange Commission (SEC) this week. PLTR stock is a common holding of many of them.
Most notably, Palantir co-founder Peter Thiel’s Mithril venture capital fund sold $48 million worth of Palantir stock in the third quarter, which ended in September. The shares were acquired about a decade ago.
Coatue Management, run by Philippe Laffont, purchased a new position in Palantir. The hedge fund bought just under 894,000 shares of the AI platform company. This is more notable since Coatue trimmed stakes in nearly all of the Magnificent 7 stocks except Meta Platforms (META).
On Monday, Wedbush Securities analyst Dan Ives chose Palantir stock as one of his top picks for 2024 as he predicted that AI and cloud spending will rise more than 20% next year.
“We believe the new tech bull market has now begun and tech stocks are set up for a strong 2024 as the AI spending tidal wave hits the shores of the broader tech sector.”
Ives has reiterated his $25 price target on Palantir stock several times since July, but the analyst has chosen Apple (AAPL) stock as his top pick heading into the new year.
AI stocks FAQs
First and foremost, artificial intelligence is an academic discipline that seeks to recreate the cognitive functions, logical understanding, perceptions and pattern recognition of humans in machines. Often abbreviated as AI, artificial intelligence has a number of sub-fields including artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The end goal of the entire field is the creation of artificial general intelligence or AGI. This means producing a machine that can solve arbitrary problems that it has not been trained to solve.
There are a number of different use cases for artificial intelligence. The most well-known of them are generative AI platforms that use training on large language models (LLMs) to answer text-based queries. These include ChatGPT and Google’s Bard platform. Midjourney is a program that generates original images based on user-created text. Other forms of AI utilize probabilistic techniques to determine a quality or perception of an entity, like Upstart’s lending platform, which uses an AI-enhanced credit rating system to determine credit worthiness of applicants by scouring the internet for data related to their career, wealth profile and relationships. Other types of AI use large databases from scientific studies to generate new ideas for possible pharmaceuticals to be tested in laboratories. YouTube, Spotify, Facebook and other content aggregators use AI applications to suggest personalized content to users by collecting and organizing data on their viewing habits.
Nvidia (NVDA) is a semiconductor company that builds both the AI-focused computer chips and some of the platforms that AI engineers use to build their applications. Many proponents view Nvidia as the pick-and-shovel play for the AI revolution since it builds the tools needed to carry out further applications of artificial intelligence. Palantir Technologies (PLTR) is a “big data” analytics company. It has large contracts with the US intelligence community, which uses its Gotham platform to sift through data and determine intelligence leads and inform on pattern recognition. Its Foundry product is used by major corporations to track employee and customer data for use in predictive analytics and discovering anomalies. Microsoft (MSFT) has a large stake in ChatGPT creator OpenAI, the latter of which has not gone public. Microsoft has integrated OpenAI’s technology with its Bing search engine.
Following the introduction of ChatGPT to the general public in late 2022, many stocks associated with AI began to rally. Nvidia for instance advanced well over 200% in the six months following the release. Immediately, pundits on Wall Street began to wonder whether the market was being consumed by another tech bubble. Famous investor Stanley Druckenmiller, who has held major investments in both Palantir and Nvidia, said that bubbles never last just six months. He said that if the excitement over AI did become a bubble, then the extreme valuations would last at least two and a half years or long like the DotCom bubble in the late 1990s. At the midpoint of 2023, the best guess is that the market is not in a bubble, at least for now. Yes, Nvidia traded at 27 times forward sales at that time, but analysts were predicting extremely high revenue growth for years to come. At the height of the DotCom bubble, the NASDAQ 100 traded for 60 times earnings, but in mid-2023 the index traded at 25 times earnings.
Palantir stock forecast
Palantir has just barely marked a new two-year high on Friday. The stock has risen as high as $20.34 at the time of writing, 10 cents above the August 1 high of $20.24 and its highest value in two years.
There is no telling how far Palantir stock could rise in the present rally. The 161.8% Fibonacci Extension (not pictured) provides a reading of $22.18 though. The 9-day Simple Moving Average (SMA) is strongly leading its 21-day SMA counterpart, as would be expected in a rally of this type.
Support rests nearby at $18, a level that has been used as both resistance and support since the summer.
PLTR daily chart
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