Palantir Stock Keeps Climbing: Here’s Why Investors Should Stay the Course

Money Morning’s Chris Johnson couldn’t have called it any better. A few weeks ago on Jan. 13, big data analytics specialist Palantir (NASDAQ:PLTR) had suffered a sizable loss of equity value relative to its second day of trading of the new year. However, Johnson pounded the table, noting that the dip in PLTR stock represented a long-term buy.

At the time, the expert confidently stated that Wall Street was on the wrong side of the Palantir trade. Even though the company consistently demonstrated its fundamental prowess, only about 19% of covering analysts rated PLTR stock as a “buy.” While it’s a different business, it’s a wild picture of contrasts compared to Nvidia (NASDAQ:NVDA) or similar names, which enjoy almost-unanimous support.

As it turned out, Johnson was spot on. One session later, PLTR stock righted the ship and for the most part continued marching higher. It can be argued that the extraordinary price action of PLTR has more to do with the surrounding sentiment rather than singular financial metrics like the price-earnings ratio. Still, the fundamentals are important.

Palantir consistently positions itself as a leader in enterprise-level artificial intelligence. It has also secured strong federal contracts while also benefiting from robust defense spending. One has to assume that the current administration should be net favorable for PLTR stock, making it a worthwhile opportunity.

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Statistical Trends Favor Steadily Acquiring PLTR Stock

To be sure, Palantir isn’t without its concerns. Over the past 52 weeks, PLTR stock gained nearly 405%. With the DeepSeek AI threat demonstrating that disruption can occur at anytime from anywhere, investors can’t afford to be complacent. Still, what PLTR offers which other competing investments sometimes cannot is reliable consistency.

Since September 2020, Palantir’s market data viewed stochastically — that is, devoid of any other context aside from the temporal — reveals a clear upward bias. On a week-to-week basis, a position entered at the start of the period has a 55.11% chance of rising by the end of it. On a four-week basis, the odds only dip slightly to 53.15%.

Of course, the market — as alluded to earlier — runs largely on human emotions. And in extreme circumstances of fear or greed, the response can be heightened beyond the usual stochastic rhythm. For example, last week, PLTR stock gained 7.84%, which is a strong performance. When PLTR gains between 5% to 10% in a one-week period, there’s a 51.22% chance that the fourth subsequent week will see a positive return.

Yes, the long odds fade again (slightly). However, PLTR stock has demonstrated that it will continue to foster an upward bias, even when the current trend is bullish. That might seem like an obvious point but the reality is that investors are buying Palantir even when they know they’re not getting a discount.

It’s one thing to say that investors buy the dips in PLTR stock — that would be expected for such a popular security. It’s quite another to buy the rips because it implicitly means investors are anticipating further gains.

Don’t Overthink It

To be 100% clear, investors shouldn’t approach Palantir with reckless abandon. However, at this juncture, I see little reason based on the evidence to adopt a bearish stance on PLTR stock. Instead, while the equity is priced below the three-digit threshold, it could be an interesting long-term opportunity.

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