Stock Market

Palantir (NYSE:PLTR) stock is among the names that have seen impressive moves in recent weeks.

In fact, shares of PLTR stock surged over 10% because a veteran Wall Street analyst initiated coverage and had some positive remarks. The market’s momentum further boosted gains.

While many analysts on Wall Street have been bullish about the stock, retail investors should approach it with caution.

The company has yet to report Q2 results on Aug. 7 and while revenue is expected to be around $532M, analysts expect losses of 5 cents per share.

Why Analysts Are Bullish on PLTR Stock

Palantir received an “outperform” rating and a $25 price target from respected analyst Dan Ives at Wedbush. Ives expressed confidence in the company’s promising trajectory. As a result, PLTR stock surged approximately 7.5% in early morning trading.

Ives predicts Palantir will benefit from the AI industry’s growth, using its experience in handling data to create and offer AI solutions.

The company’s experience in combining artificial and human intelligence further strengthens its position. According to Ives, Palantir has only just begun to tap into the potential brought by the AI revolution.

Recent Partnership with J.D. Power

Palantir shares rose over 2% last week following news of a new partnership with J.D. Power, another data analytics company.

The collaboration aims to provide innovative insights into the automotive industry using Palantir’s generative artificial intelligence capabilities. This industry-first deal will offer unique observations in the automotive sector.

J.D. Power, known for analyzing millions of vehicle transactions annually, is teaming up with Palantir to further enhance its capabilities in the automotive market.

The collaboration aims to revolutionize industry analysis and strategy by combining extensive automotive databases with powerful analytics platforms. This partnership will enable clients to gain unique and previously unattainable insights.

As per the news release, J.D. Power has started utilizing Palantir Foundry to create essential solutions.

These include repair analytics for monitoring warranty costs, EV battery health analytics, digital journey optimization, and an intelligent alerts system to track vehicle sales and develop market strategies.

Why Retail Investors Should Be Cautious

Palantir Technologies Inc. has majority ownership of 53% by retail investors, making them the most influential shareholder group.

Institutions, owning 33%, also faced losses when the market cap dropped to US$31 billion last week. However, it was the retail investors who experienced the most significant losses.

This only means that PLTR is inherently risky equity. Although the stock has seen price appreciation from its Q1, there’s still considerable uncertainty surrounding the company’s financials as it reports Q2 earnings.

With short-term losses likely on the cards, retail investors should remain cautious before investing in Palantir. It has the potential to prove rewarding over long-term horizons, but short-term speculations should be avoided as future price movements remain unpredictable.

On the date of publication, Chris MacDonald 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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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