Palantir - Is the Nasdaq Move the Final Push to $75?

$Palantir Technologies Inc.(PLTR)$ announcement to delist from the NYSE and move to Nasdaq on November 26, 2024, alongside potential inclusion in the Nasdaq-100 Index, presents a compelling case for both near-term volatility and strategic positioning.

With Wedbush Securities upgrading Palantir's price target to $75, many investors are questioning whether the stock can sustain its meteoric rise and break into new highs. Let’s unpack the situation, the catalysts at play, and the trading setups I am considering.

Key Developments Fuelling the Rally:

1. Nasdaq-100 Inclusion Speculation: Anticipation of inflows from index-tracking funds is supporting demand.

2. AI Growth Narrative: Palantir continues to benefit from its perceived leadership in AI applications, particularly in enterprise and government sectors.

3. Wedbush Upgrade: The brokerage’s raised price target to $75 has encouraged bullish sentiment, particularly among retail investors.

While these factors are driving the rally, the stock’s rapid ascent raises questions about whether the gains are sustainable.

Positioning for What’s Next

1. Core Long Position for Continued Upside

I remain bullish on Palantir as a long-term play in AI and data analytics. With the current rally, however, new entries require discipline:

• Buy Zone: Accumulate shares below $60 on any pullbacks.

• Target: Hold for a medium-term price of $75, provided fundamentals like revenue growth and profitability remain strong.

2. Tactical Options Play for Momentum

The stock’s sharp move creates opportunities for options traders:

• Strategy: Buy $70 calls expiring January 2025 to capture potential post-Nasdaq listing momentum.

• Risk Management: Limit position size due to the possibility of profit-taking after November 26.

3. Short-Term Hedge

Given the stock’s rapid rise, a contrarian hedge may be prudent:

• Strategy: Initiate a bear put spread ($60/$55) if the stock encounters resistance near $65-$70.

• Rationale: This positions for a short-term pullback, particularly if the Nasdaq news is fully priced in.

Revised Price Outlook

Based on Palantir’s performance and catalysts:

• Bull Case: $75-$80 (continued momentum post-Nasdaq listing and strong Q4 guidance).

• Base Case: $65-$70 (consolidation after listing-driven rally).

• Bear Case: $55-$60 (profit-taking if Nasdaq inclusion fails to spark additional demand).

Final Thoughts

At closing price of $64.35 on November 22, 2024, Palantir’s valuation reflects high expectations but also significant long-term potential. The upcoming Nasdaq listing could act as a short-term catalyst, while AI-driven growth provides structural tailwinds. For investors and traders, this is a moment to balance optimism with caution.