Analyst Says Palantir Technologies (PLTR) Could See a 'Longer Pullback' After 'Meteoric Rise'

We recently published a list of 10 Buzzing Stocks After Latest Earnings Season. In this article, we are going to take a look at where Palantir Technologies Inc (NASDAQ:PLTR) stands against other buzzing stocks after latest earnings season.

Markets were cheering the latest US-China trade deal, after which the two countries will significantly reduce tariffs on each other’s imports for 90 days. The deal practically negates all bear cases modeled by Wall Street analysts based on the impact of tariffs.

Sylvia Jablonski, Defiance ETFs CEO and CIO, called the deal a “game changer” during a program on CNBC.

“I think both countries probably saw a little bit of the demise of what would be here with a non-tariff deal as the data came in. You had a lot of complaints around China across all sectors and then in the US, retailers were reaching out to President Trump and saying that shelves are empty and, you know, a lot of panic about semiconductor software companies. I think that this is really a game changer for both countries, and the big message here is that both countries, it sounds like, decided that they really don’t want to decouple, and, you know, make America great might also mean that, you know, China stays.”

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For this article, we picked 10 stocks currently making moves amid the latest earnings season. With each stock we have mentioned the latest hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Palantir Technologies Inc (NASDAQ:PLTR)

Number of Hedge Fund Investors: 41

Paul McCarthy from Kisco Capital recently analyzed Palantir Technologies Inc (NASDAQ:PLTR) shares from a technical perspective during a program on Schwab Network and said that the stock could see a pullback in the long term:

“I think afterwards, you’ll see a longer pullback. There may be a consolidation period, possibly a time for the company to grow some revenues into their valuation. Maybe some longer-term investors will start to come back into the stock. But it’s just been a tremendous, meteoric rise. To me, it does look like a five-wave impulsive pattern. Investors are probably signaling that for the long term, this is probably just the first five waves up and that there will be more upside in the coming years. However, it’s clear we’ve kind of pulled forward a lot of the valuation, just given the multiples that the stock’s currently trading at.”

Palantir’s valuation is concerning for many. Its revenue growth is expected to slow over the next two years, with estimates suggesting a 22% YoY growth rate, potentially bringing revenues to around $4 billion by fiscal 2026. If Palantir Technologies Inc (NYSE:PLTR) can improve margins by 100 basis points annually, it would be able to generate about $1.5 billion in adjusted operating income by FY26, with a present value of $1.3 billion when discounted at 8%. Applying an S&P 500-like growth multiple of 2.5 to 2.75 times earnings, Palantir Technologies Inc (NYSE:PLTR) would have a P/E of 46, translating to a price target of $27.

Ithaka US Growth Strategy stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q1 2025 investor letter:

“From the front-lines of warzones to Fortune 500 enterprises, Palantir Technologies Inc. (NASDAQ:PLTR) builds software to address high-level action items, respond to defense and security concerns, and improve organizational efficiency. The company offers a number of software products from data analysis and curation (Palantir Gotham and Foundry) to a cloud-based operations software (Apollo). The company rose to popularity, in part, due to several government contracts (~55% of revenues) arising from recent and continuous global conflicts. In addition to creating generative AI defense solutions for governments across the globe, commercial customers (~45% of revenues) have flocked to the company’s security and data analysis solutions to monitor and analyze business data and protect sensitive information. The stock’s rise in the quarter was due to a strong earnings report that beat Street expectations as well as investor excitement with regard to the company’s ability to further monetize its AI product across its growing customer base.”

Overall, PLTR ranks 9th on our list of buzzing stocks after latest earnings season. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that under-the-radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.