There’s no denying that Palantir Technologies (NYSE:PLTR) stock provides exposure to the artificial intelligence trend.
However, there are valid concerns that PLTR stock has run too high, too fast. So, be sure to time your entry point carefully if you plan to invest in Palantir Technologies.
Palantir Technologies provides security products and serves both public and private clients. It’s no exaggeration to say that Palantir’s shareholders have been on a roller-coaster ride over the past few years.
However, PLTR stock caught a bid recently. It’s possible that the buyers got ahead of themselves, so some profit-taking might be in order. Palantir Technologies is still a high-conviction tech business with an AI angle, but trading the stock successfully will require some patience and agility.
Palantir Technologies Goes All-in on AI
Clearly, Palantir Technologies’ management knows exactly what the market wants to hear. People are hungry for anything and everything related to AI nowadays.
Thus, it’s surely not mere happenstance that Palantir called itself “a worldwide leader in Artificial Intelligence” in its first-quarter 2023 business update.
Palantir Technologies backed up that claim when it expanded its partnership with Jacobs Solutions (NYSE:J). The two companies, according to the press release, will deploy “Palantir’s AI capabilities to commercialize new AI solutions spanning critical infrastructure, advanced facilities, supply chain management and more.”
Additionally, Palantir announced a partnership with Panasonic (OTCMKTS:PCRFY) subsidiary Panasonic Energy of North America; this deal “expands Palantir’s signature platform including artificial intelligence and edge capabilities in the manufacturing space.”
Again, Palantir Technologies is diving headfirst into the AI trend in 2023, and undoubtedly financial traders took notice of this.
PLTR Stock Gets a Surprising Downgrade
Palantir Technologies’ AI connection, along with the company’s impressive quarterly results, seem to have prompted a huge rally in PLTR stock. After Palantir released its first-quarter 2023 results on May 8, the company’s shares doubled in value.
As you might expect, Palantir Technologies CEO Alexander C. Karp mentioned AI. “The depth of engagement with and demand for our new Artificial Intelligence Platform is without precedent,” Karp boasted.
I’ll admit, Palantir Technologies’ quarterly results were quite good. The company’s total revenue grew to $525 million, up 18% year over year. In addition, Palantir achieved its “second consecutive quarter of positive GAAP net income.”
However, according to TheFly, Raymond James analysts downgraded PLTR stock from “strong buy” to “outperform.” Reportedly, the analysts cited the sizable share-price appreciation since Palantir Technologies reported its quarterly earnings.
That objection is entirely understandable. I certainly don’t want investors to be price-chasers after a huge rally. So, what should financial traders do?
Relax, and Wait for PLTR Stock to Pull Back
Despite the downgrade, the Raymond James analysts are still enthusiastic about Palantir Technologies’ AI positioning. Plus, the analysts actually raised their Palantir Technologies share-price target from $15 to $18.
But again, we don’t want to be price-chasers here. So, cautious investors need to be patient and nimble with their timing.
The best strategy, I believe, is to wait for PLTR stock to pull back to $12 before hitting the “buy” button. That way, you can still benefit from Palantir Technologies’ future growth but also get in at a more favorable price point.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.