Palantir Technologies (PLTR.O) advanced 1.6% to $145.14 in Tuesday trading, buoyed by an analyst upgrade from Daiwa Capital Markets. The firm raised its rating on the data analytics company to "Buy" from "Neutral," though it reduced its price target to $180 from $200.
Valuation Concerns Persist
Despite the upgrade, debates over Palantir's valuation continue. Morningstar analyst Mark Giarelli increased his fair value estimate to $150 per share, citing the company's projection of 61% revenue growth for 2026. However, he cautioned that its premium valuation could face rapid compression if growth moderates.
The software sector remains volatile following last week's AI-driven selloff, which has left the group trailing the S&P 500 by nearly 24 percentage points over the past three months. Palantir, often viewed as an AI bellwether, has been caught in this turbulence.
Macro Data in Focus
Investor attention now shifts to upcoming economic releases. The U.S. employment report for January is scheduled for Wednesday, followed by the consumer price index on Friday. These inflation metrics could significantly influence the trajectory of high-multiple technology stocks.
Daiwa analyst Shigemichi Yoshizu expressed a positive view of Palantir's recent earnings, stating the company's "sharp growth will persist and accelerate." Yet, with implied volatility elevated across the software sector, individual names like Palantir remain susceptible to sharp price reversals.
The broader question is whether Tuesday's gains will hold ahead of the economic data or if the stock will be pulled back into the sector-wide rotation that has dominated recent trading.
