Palantir has been eerily quiet since the August sell-off. I think the technicals and fundamentals are lining up for this AI leading company to break resistance and run towards $200 either just prior to, or following earnings on Nov. 3. Palantir, other hyper growth AI-buildout names, as well as the Nasdaq sold off quite sharply in August on concerns of extended valuations. Since then, the company has gone very quiet in both volatility and volume setting up a potential breakout. I’ve been trading in and out of Palantir in our ‘fast money’ managed account Active Opps (linked below), but just recently added it to our slower-moving growth portfolio on the Sept. 15 portfolio update and rebalance. Unless some drastic new piece of information comes to light, I expect to be holding this name for some time to come. Palantir operates in the data-analysis industry and AI software space and is arguably the most cutting edge, opportunistic name in the software space. Call it the Nvidia of software, perhaps. Palantir has a huge total addressable market with a combination of very sticky long-term government defense contracts, along with its push into enterprise and commercial sectors such as healthcare, financial services and banking, manufacturing, and energy / utilities. Despite the extremely rich 2026 forward valuation of 181 times 2026 expected non-GAAP earnings ($0.85) the company is increasingly generating free cash flow of $1.1 billion this year, expected to grow to almost $2B next year. Also on the chart is FCF margin percentages of 40% and above for the foreseeable future. Looking at the weekly chart below you’ll notice topline revenues growing consistently and expected to be +48% next year with 131% GAAP EPS growth of 131% in 2026. Again, I can’t overstate how extreme the valuations are and how much this stock is priced to perfection. But at a $430 billion valuation the market is expecting great things from this company and Alex Karp has the ability to grow this company into its potential. There was a time that NVDA was trading at similar valuations before Jensen and co hit their stride. With PLTR, and so many other hyper growth AI-buildout companies that are not yet profitable, a combination of fundamental conviction in revenue growth, along with a good understanding of technical analysis that serves as your risk and reward parameters, is key. Looking at the weekly chart we see a floor of technical support just below from the 20-week moving average (same thing as the 100-day moving average – > 5 days in a trading week), along with parallel channel support from summer of 2024. This support zone is around the $160 zone. To start, we must hold here as the growth trade has been pausing with the various macro overhangs. The Palantir / S & P ratio has been rising since 2024 and shows no signs of slowing. Moving down to the daily chart you’ll notice the August dump from around $200 to $145 before the consolidation capped off by the dashed black lines set in. The volume and volatility has dried up quite a bit setting the stage for a breakout from resistance. In our Active Opps portfolio (linked below) we hold a 5.53% allocation, which is sizable, but we’ve held as large as a 11% position. There are a few names that I’ve covered in this Tuesday column like BE , MP , and CRDO that are showing signs of exhaustion that I’m looking to cut, which frees up buying power to increase Palantir’s allocation. A break above $190 is considered a breakout and higher prices are expected while we remain above $180 where I’ll look to increase our exposure in Active Opps. In our slower moving Tactical Alpha Growth Portfolio (TAG) we hold a newly added 2% position since Sept 15th within the consolidation. If we start seeing a test of $190 I’ll look to kick that up to approximately a 5% holding. -Todd Gordon, Founder of Inside Edge Capital, LLC We offer active stock alerts , portfolio management, as well as regular market updates like the idea presented above. DISCLOSURES: Gordon owns PLTR personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
