"Shares of Palantir (NASDAQ:PLTR) have been scorching hot in recent years, and it's continued to defy the laws of gravity. But after a spectacular quarterly earnings report, perhaps the laws of gravity are starting to come into effect. There wasn't much in that last quarter to get too bearish about. AI demand is still red-hot, and, the AI Platform (AIP) remains a compelling growth driver."
"Still, it seems like the AI bubble talk is getting louder by the day, and, with that, we might have an environment where it takes more than a strong beat and raise; it might take a blowout quarter. Arguably, a blowout might no longer be able to do it when it comes to the hyper-growth plays that some investors may have acquired with less regard for valuation."
"In any case, Palantir stock has more than tripled in the past year while gaining more than 860% in the past two years. Such a run has created profound wealth for the retail crowd, but the big question is what will happen once the AI trade runs out of steam. All the AI bubble chatter itself, I think, is not troubling enough to justify running to the hills."
Palantir's stock has surged dramatically, more than tripling over the past year and rising over 860% in two years, driven by strong AI demand and the AI Platform (AIP). The recent quarterly earnings beat reinforced growth but may no longer be sufficient to sustain momentum as investor expectations rise and the AI bubble conversation intensifies. Legendary investor Michael Burry's purchase of put options adds bearish pressure, creating a tug-of-war with bullish analysts like Dan Ives who see further upside. Elevated valuation and crowded retail ownership increase vulnerability to a significant drawdown if AI enthusiasm cools.
Read at 24/7 Wall St.
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