Palantir (PLTR) is now facing a test of investor confidence.
After the stock quadrupled (up 340%) in 2024, fueled by increasing demand for AI software, the stock has pulled back sharply in recent weeks.
Palantir provides AI-driven data-analytics software to the U.S. government and military as well as to commercial clients.
Its revenue growth has accelerated on rising demand for AI-powered decision-making software.
In early February the company reported that Q4 revenue grew 52% year-over-year to $558 million and revenue for all of 2024 grew 29% to $2.87 billion. The stock peaked at $125 on Feb. 18.
On Feb. 19, however, Palantir stock lost 10% on news of Pentagon budget cuts and Chief Executive Alex Karp’s stock-sale plan. The stock continued to fall in the following four sessions.
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On March 10 the stock fell 10% amid a broader market selloff caused by economic uncertainty from President Donald Trump’s tariffs.
Even after the tumble, Palantir stock is up 3.2% in 2025 to date, outpacing the S&P 500′s decline of 5.2% during that period.
Investors are now asking whether the stock can repeat its advance from last year or more downside is ahead.
‘PLTR shares are not cheap despite the more than 35% fall,’ TheStreet Pro’s Chris Versace says.
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Veteran fund manager buys Palantir’s stock
On March 11 Wall Street veteran Chris Versace initiated a stake in Palantir at $79.11. He set an $87 price target and a stockpile rating. The holding accounts for 1% of his portfolio.
Versace sees a potential catalyst to drive the stock higher: Palantir’s first AIPCon of 2025 on March 13, an event where the Denver company unveils new products and customers.
Related: Veteran analyst who predicted 2024’s rally updates opinion as stocks correct
“Should Thursday’s event prove to be a catalyst for the shares, we’ll look to revisit our price target as needed. If not, we’ll look to pick up more shares closer to support levels,” he wrote on TheStreet Pro.
Versace added that the shares are approaching their 100-day moving average near $73.58.
He also highlights Palantir’s December stock buyback at an average price of $74.74, which is close to current levels. “We would not be surprised to learn the company had been buying stock when it reports its next quarterly results,” he said.
Versace’s career began in the 1990s. He had predicted Nvidia’s (NVDA) slump and sold some of his shares at $144.56 on Jan. 7, securing a 90% gain.
Versace emphasized discipline, stating that he was not “looking to chase” the stock.
“We recognize that even with our more disciplined approach, PLTR shares are not cheap despite the more than 35% fall,” he added.
Yahoo Finance estimates the stock’s forward price-to-earnings multiple at 135.
Wedbush remains bullish after the slump
Investment firm Wedbush said it continued to see Palantir as a tech winner after the recent tumble.
“We believe this is Year 3 of what will be an 8- to 10-year buildout of the AI Revolution,” the firm says. “Will there be some near-term headwinds from Trump policy? Yes. But this in no way changes the $2 trillion of AI [capital spending] on the horizon.”
The firm has long been bullish on Palantir. It has an outperform rating on the shares with a price target of $120.
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“This [selloff] will prove to be a generational time to own tech winners with patience and not the time to throw in the white towel on this bull market,” the firm said.
Wedbush’s “top picks to own in this brutal selloff” include Nvidia (NVDA) , Apple (AAPL) , Tesla (TSLA) , Microsoft (MSFT) and Palantir.
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