PLTR Stock Finds Buyers on Pullbacks Despite Swiss Govt Rejecting Palantir
With the Dow and Nasdaq struggling for direction and Micron offering rare post-earnings optimism in semiconductors, Palantir’s renewed...
Quick overview
- Palantir Technologies has rebounded significantly over the past month, recovering from a November selloff despite ongoing concerns about its valuation and reliance on government contracts.
- The stock's recent volatility is largely driven by its high valuation, trading at approximately 465 times forward earnings, which leaves little room for error in performance.
- While Palantir's government contracts provide stability, recent insider sales and mixed international expansion results have heightened market jitters about the company's long-term sustainability.
- Despite impressive earnings growth, skepticism remains as a prominent investor has taken a short position, reflecting broader concerns about whether Palantir's AI narrative can withstand scrutiny.
Live PLTR Chart
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With the Dow and Nasdaq struggling for direction and Micron offering rare post-earnings optimism in semiconductors, Palantir’s renewed rebound highlights how selective risk appetite has become across U.S. equities.
Palantir Rebounds as Dip Buyers Step Back In
Palantir Technologies’ stock has staged a notable recovery over the past month, rebounding from its November selloff and showing renewed bullish price action despite lingering doubts over valuation and business concentration. While shares dipped midweek, the pullback was quickly absorbed, with buyers reclaiming losses the following session—an important signal that demand remains strong beneath the surface.
This resilience comes against a backdrop of mixed broader market conditions. Inflation data came in cooler than expected, reviving hopes for Federal Reserve rate cuts, yet major indices were largely flat. In that context, Palantir’s 4.8% afternoon rally stood out as an example of investors selectively rotating back into high-beta AI names rather than chasing the broader market.
A November Selloff Still Looms Over Sentiment
Concerns surrounding Palantir’s stretched valuation and its heavy reliance on U.S. government contracts triggered a sharp selloff in November, reviving skepticism about the company’s long-term sustainability. Those fears have not disappeared. Instead, they continue to cap enthusiasm even as the stock finds buyers on weakness.
Midweek, PLTR briefly fell roughly 5%, erasing a short-lived rebound and dragging shares back toward the $177 area. The move coincided with broader market softness and renewed debate over whether Palantir’s rally had simply run too far, too fast.
PLTR Chart Daily – Rebounding off the 20 SMA
Technically, the stock slipped below its 50-day simple moving average, a level that had supported the uptrend since the summer. While that break initially raised concerns about a deeper pullback toward $150, the rapid rebound suggests that traders remain willing to defend key levels for now.
Valuation Anxiety Drives Volatility
At the heart of Palantir’s volatility is valuation. Trading at roughly 465 times forward earnings, the stock sits among the most expensive names in the S&P 500. At these levels, even strong execution leaves little margin for disappointment.
Market commentators have increasingly warned that expectations embedded in the share price are detached from near-term financial reality. With a market capitalization approaching $450 billion, Palantir is being priced as a dominant, enduring AI platform rather than a company still heavily dependent on government contracts and episodic deal flow.
This valuation sensitivity helps explain why even minor headlines or routine insider activity can trigger outsized moves.
Insider Sales Add to Market Jitters
Fueling recent anxiety was the disclosure that Chief Financial Officer David Alan Glazer sold more than $1.6 million worth of shares. While such transactions are common and often pre-planned, the timing unsettled investors given Palantir’s momentum-driven trading profile.
In high-multiple stocks, insider selling tends to amplify existing concerns rather than create new ones. In Palantir’s case, the sales reinforced fears that valuation may have run ahead of fundamentals, even as the stock quickly stabilized afterward.
Government Contracts Continue to Anchor the Story
Despite market skepticism, Palantir’s government business remains a powerful stabilizing force. A major December catalyst was the U.S. Navy’s ShipOS partnership, which authorizes up to $448 million for deploying Palantir’s Foundry and AI Platform across the Maritime Industrial Base.
Pilot deployments have already demonstrated tangible operational benefits, sharply reducing planning and review timelines at submarine shipyards. These results reinforce Palantir’s reputation in mission-critical, high-security environments and provide a blueprint for expanding defense and industrial contracts.
International Expansion Shows Mixed Results
Palantir’s government footprint also extends beyond U.S. borders. In December, the company renewed a three-year contract with France’s domestic intelligence agency, DGSI, covering platform supply, integration, and operational support. The renewal underscores the stickiness of Palantir’s software once embedded into national security workflows.
However, not all international developments have been positive. Swiss defense authorities recently rejected Palantir’s software following an internal risk assessment. The central concern was data sovereignty, with officials citing the company’s U.S. jurisdiction as a potential risk to full control over sensitive military data.
The Swiss decision highlights a structural challenge for Palantir as it expands globally: trust, regulation, and geopolitical considerations can be just as decisive as technical capability.
Strong Earnings Fail to Silence Critics
Palantir’s latest earnings report was objectively impressive. Revenue surged 63% year over year to $1.18 billion, while net income tripled to $475.6 million. Guidance was also raised, with full-year revenue projected near $4.4 billion and free cash flow expected between $1.9 billion and $2.1 billion.
Yet the numbers failed to materially calm investor concerns. More than half of revenue still comes from government contracts, leaving the company exposed to political gridlock, shifting defense priorities, and budget uncertainty. While the commercial segment is growing, it remains concentrated among a relatively small number of large enterprise clients.
Bearish Bets Keep the Debate Alive
Skepticism intensified further after prominent investor Michael Burry disclosed a short position in Palantir. The move reinforced the narrative that the company’s AI story may be overextended at current prices.
With macro uncertainty lingering, rates still restrictive, and valuation multiples stretched, Palantir now sits at the center of a broader market debate: whether AI leaders can continue defying gravity, or whether fundamentals will ultimately reassert control.
A Market Still Willing to Buy the Dip
For now, Palantir’s ability to rebound quickly from pullbacks suggests bullish conviction remains intact. However, as long as valuation concerns dominate the conversation, volatility is likely to persist. The stock may continue rewarding dip buyers in the short term, but sustaining the rally will require not just growth, but proof that its AI ambitions can scale profitably and predictably.
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