To The Moon

Palantir, being a tech company specialising in big data analytics & existing in the intersection of data & AI🤖 made a comeback after gaining profitability in Q4 2022. Investors were thrilled as the company reported its 1st-ever quarter of positive net income at $31M on a GAAP basis & rushed in due to the recent 🤖 hype. Shares rose nearly 21% over the 5 trading days after earnings & jumped more than 43% since the start of 2023🥳 It crossed the $10 mark on 16/2 (Thu) but PLTR’s comeback was short-lived with it diving again after after analysts dampened expectations🐻🐻🐻 PLTR dived 7.93% to close at $8.47 on the 1st 🇺🇸 trading day of this week (21/2)🫠🫠🫠

Why Are Analysts 🐻-ish About PLTR❓

⚠️ While PLTR's GAAP profit figures were something to cheer about, Royal Bank of Canada analyst Rishi Jaluria brings this perspective to light, saying that Palantir's 4Q22 profitability was "driven by below-the-line adjustments" such as interest income, & that the quarter was in-line with expectations ➡️ This means that profitability may be slightly overhyped😅

⚠️ William Blair analyst Louie DiPalma also turned the tables on PLTR's rally. DiPalma noted that there are potentially 6 big problems coming up for PLTR – 6 major government contracts that are up for review over the next year & a quarter. That’s bad enough, but 3 of the contracts in question are among the 4 biggest contracts that PLTR has. Worse, there are signs that PLTR has big new competition from the open-source market, which will likely be a lot less stringent about contracts. That’s a potentially huge loss for PLTR. However, PLTR already took 1 actual loss in Europe. The German Federal Constitutional Court nullified PLTR's AI algorithm for use in policing. Ultimately, the algorithm found itself declared as unconstitutional. Some noted that the algorithm could ultimately be used as a “predictive policing” tool. It could ultimately call out key mistakes & discriminatory actions taken by legal officials.

⚠️ Despite Monness analyst Brian White believing that PLTR is “well positioned to benefit from digital transformation, Big Data, the cloud, AI, and a mercurial geopolitical landscape”, he feels that the company’s revenue recognition from government-related contracts has “proven lumpy” & cautioned that “the darkest days of this downturn are ahead.”

‼️ Overall, Wall Street is sidelined on PLTR, with a Hold consensus rating based on 2 Buys, 6 Holds, & 5 Sells, & with average price🎯 of $8.41 per share🫠🫠🫠

🤔💭My Thoughts ➡️ Whether PLTR can take-off✈️ after this positive rally will largely depending in whether it can keep up a positive net income on a GAAP basis over the next 2-4 quarters. I suspect PLTR will either plunge BIG-time💥💥💥 or 🚀🚀🚀 with each earnings release, & it might make a good swing trade stock if it reports positive earnings. Other that that, I’m not for holding PLTR as the risks ouweighs the gains for me given that 1 of my investing goal🥅 is capital preservation

Fellow 🐯🐯🐯 are you 🐂-ish or 🐻-ish about PLTR❓Share your thoughts with me in the comments section❣️

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