Palantir Technologies (PLTR)

Dec 22, 2022Trade Ideas

Over the last few days, Palantir Technologies (PLTR) gapped from $8 to about $6.50.

All after Wolfe Research downgraded the stock, warning it could drop to less than $5. Not helping, The Wall Street Journal says the company is a high-profile casualty of the boom turned bust in special purpose acquisition companies (SPACs). And there are fears about the company’s infrastructure spending heading into a potential recession.

However, don’t write the stock off just yet.

According to analysts at Bank of America, the pullback is overdone. “We expect Palantir to repeat another year of strong sales, as continued supply chain disruption and an increasingly expected recession calls for further operations optimization and data management,” they said. “However, as corporate software budgets struggle, we expect Palantir to pursue that growth with lower pricing and margins (especially considering its current $2.4bn in net cash).”

The firm currently has a buy rating on PLTR and sees 100% upside.

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