Short Trade Idea
Enter your short position between $153.12 (yesterday’s intra-day low) and $161.11 (an intermediate horizontal resistance level).
Market Index Analysis
- Palantir (PLTR) is a member of the NASDAQ 100, the S&P 100, and the S&P 500 indices.
- All three indices are retreating from all-time highs with rising bearish trading volumes.
- The Bull Bear Power Indicator of the NASDAQ 100 Index is bearish with a descending trendline.
Market Sentiment Analysis
Equity markets turned lower yesterday as earnings rolled in, AI-related earnings failed to validate the massive rally, and fears that AI tools would replace software and related jobs mounted. PayPal plunged following its earnings release, but Walmart became the latest member in the $1 trillion club, driven by value-seeking consumers. Gold and silver jumped as bottom hunters stepped in. AMD sold off in after-hours despite upbeat earnings and an improved outlook, while Chipotle also extended its losses. The four-day partial government shutdown ended, and all eyes are on Alphabet’s earnings today.
Palantir Fundamental Analysis
Palantir is a software-as-a-service (SaaS) technology company and a leading US player in artificial intelligence. It counts the intelligence and defense sectors as significant clients, and its share price rode the AI hype higher.
So, why am I bearish on PLTR following its earnings release?
While Palantir beat expectations of $1.33 billion in revenue and $0.23 in earnings per share, reporting $1.41 billion and $0.25, respectively, and raised its 2026 outlook, excessive valuations remain. PLTR relies heavily on US government contracts, especially the Department of Defense, and all the good news is priced in. Until it unlocks additional revenue streams, I maintain my bearish view. Share dilution is another concern of mine.
Metric | Value | Verdict |
P/E Ratio | 250.60 | Bearish |
P/B Ratio | 50.94 | Bearish |
PEG Ratio | 2.48 | Bearish |
Current Ratio | 7.11 | Bullish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 250.60 makes PLTR an expensive stock. By comparison, the P/E ratio for the NASDAQ 100 Index is 35.36.
The average analyst price target for PLTR is $190.75. This suggests good upside potential, but downside risks are elevated.
Palantir Technical Analysis
Today’s PLTR Signal
- The PLTR D1 chart shows price action inside a bearish price channel.
- It also shows price action between the descending 0.0% and 38.2% Fibonacci Retracement Fan levels.
- The Bull Bear Power Indicator is bearish with a descending trendline.
- The average bearish trading volumes are higher than the average bearish trading volumes.
- PLTR corrected more than the S&P 500, a significant bearish confirmation.
My PLTR Short Stock Trade
- PLTR Entry Level: Between $153.12 and $161.11
- PLTR Take Profit: Between $105.32 and $110.85
- PLTR Stop Loss: Between $174.57 and $182.43
- Risk/Reward Ratio: 2.23
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