Palantir Technologies Inc. (PLTR) shares closed higher on Friday, rising 1.77% to $131.41, with a slight after-hours increase to $131.75. The move helped recoup some of the steep decline from the previous session as trading activity slowed ahead of the Presidents Day holiday.
Divergent Views on Valuation
Freedom Capital Markets upgraded Palantir to a Buy rating, maintaining a $170 price target. The firm cited the company's Artificial Intelligence Platform driving larger contract conversions and raised revenue estimates for 2026 and 2027.
In contrast, prominent investor Michael Burry of Scion Asset Management argued the stock is significantly overvalued, suggesting a fair value near $46. Burry disclosed holding put options, which gain value if the share price falls, though clarified he is not directly shorting the stock.
Market Context and Key Catalysts
The stock's recent volatility occurs within a broader "AI scare trade," where investors have rapidly sold software shares perceived as vulnerable to automation shifts. The S&P 500 Software & Services index has shed approximately $2 trillion in value since October.
U.S. markets are closed Monday for the holiday. Trading resumes Tuesday, with investors awaiting the release of Federal Reserve meeting minutes and the Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, later in the week.
Palantir's valuation remains a focal point. Despite reporting stronger-than-expected government revenue growth of 66% last quarter, some analysts caution the stock is still "priced for perfection." Traders will monitor the company's ability to secure major government and commercial contracts alongside broader AI sector sentiment.
