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Has Palantir Technologies Stock Peaked at $125? History Paints a Clear Picture of What's to Come.

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For more than two years, Wall Street has been in a seemingly unstoppable bull market rally. Since the end of 2022, the ageless Dow Jones Industrial Average, widely followed S&P 500 (SNPINDEX: ^GSPC), and growth stock-powered Nasdaq Composite have respectively motored higher by 31%, 57%, and 87%, as of the closing bell on Feb. 21.

While a confluence of factors has been the wind in Wall Street's sails, such as better-than-expected corporate earnings and Donald Trump's November victory, it's the evolution of artificial intelligence (AI) that's inspired this optimism more than anything else.

With AI, software and systems are given the tools to reason, make split-second decisions, and evolve over time, all without the need for human intervention. This capacity to become more proficient over time at assigned tasks, as well as learn new skills, gives this game-changing technology a mouthwatering addressable market.

A hologram of a rapidly rising stock chart coming from the upward-facing right palm of a humanoid robot.
Image source: Getty Images.

AI stocks have soared in response to aggressive enterprise spending on AI solutions and the long-term potential of this technology. While Nvidia had been the hottest stock in the AI arena -- its graphics processing units (GPUs) are the clear top choice in high-compute data centers -- it's been supplanted by another industry-leading highflier: Palantir Technologies (NASDAQ: PLTR).

Since 2023 began, Palantir's stock catapulted from around $6 per share to an intra-day high of $125.41 on Feb. 19. All told, this parabolic move higher added more than $260 billion in market value.

The all-important question is: Has Palantir stock peaked at $125? History can be the guide that answers this query.

Palantir's uniqueness, profitability, and balance sheet have fueled its parabolic move higher

But before making predictions about the future, it's important to understand how data-mining specialist Palantir became one of Wall Street's most-influential tech stocks.

The primary catalyst above all others that's fueled this rally is Palantir's moat. This is a company with two core operating segments -- Gotham and Foundry -- that have no one-for-one replacement at scale.

Gotham is the company's AI-powered software-as-a-service (SaaS) platform that assists federal governments with collecting and analyzing data, as well as planning and executing military missions. This security-focused platform typically secures multiyear contracts from the U.S. government and its immediate allies.

Meanwhile, Foundry is Palantir's newer SaaS platform that leans on machine learning to help businesses make sense of their data. This is a subscription-based service that assists with data integration, workflow management, supply chains, and decision-making. Since it's a relatively new segment, rapid growth in commercial customer count should help sustain strong double-digit sales growth.