Palantir has cleared a key technical level
But recent momentum of the retail favorite gave way to seesaw trading on Tuesday.
Palantir rebounded above its 50-day moving average and stayed there for the last three days, the first time the retail fave held that level in almost a month.
But whether the shares stay above that technical level, closely watched as an early building block of durable price momentum, remains an open question amid seesaw trading on Tuesday.
Palantir attracted a devoted following last year, when its 340% gain made it the best performer in the S&P 500 for the year, especially after it became a top “Trump trade” in the aftermath of the 2024 presidential election.
The momentum continued into 2025, when Palantir was up as much as 65% for the year at its February 18 peak, thanks to both rampant trader enthusiasm and impressive Q4 earnings results. But it was also among the worst-hit stocks in the S&P during the recent market slump, falling almost 30%.
Despite its fast-growing business — it posted roughly 30% growth in revenues — Palantir remains extraordinarily vulnerable to changes in market sentiment.
That’s because it’s arguably the single most expensive stock in the S&P 500 index, with a price-to-earnings ratio of about 170x estimated earnings over the next 12 months. Even at the peak of excitement around Nvidia back in 2023, it was only trading at about 60x earnings.
That means the level of speculative excitement among the buying public is a more important determinant of the share price than how the underlying business is doing, at least over the short term.
So the shares could continue to be highly volatile, but volatility has its benefits. Even after the rollercoaster ride of the first three months of 2025, Palantir is the fourth-best performer in the S&P 500, with a year-to-date gain of more than 25%.
