Selling Off Palantir Shares at Peak Prices: Cathie Wood's Decision – Is It Wise for You?
Revamped Reflection:
Palantir (PLTR) shares have been blazing upwards in recent months, even prompting analyst Dan Ives to envision a staggering $1 trillion market cap for this big data whiz kid in the future. Yet, powerhouse investor Cathie Wood has taken a step back from Palantir, favoring GitLab (GTLB) instead.
As the clock ticks and we near the final days to make moves, let's delve into why Cathie Wood bid farewell to Palantir stock.
Cathie Wood, the architect of Ark Invest, has reportedly discarded around 56,000 shares of PLTR, amounting to approximately $7.4 million, across three of her exchange-traded funds (ETFs). Without uttering a word about her reasons, it's plausible to ponder if worries over inflated valuations played a part in her decision.
Palantir is currently priced at a forward price-earnings ratio supercharged above 200x, surpassing the multiples of other high-growth companies, such as Nvidia (NVDA), even given! In fact, it might be accurate to say that Palantir refuses to play by the book when it comes to traditional valuation metrics.
Citi analyst Tyler Radke echoed these concerns, preserving his "Neutral" rating on Palantir. He acknowledged Palantir's rapid adoption of its Artificial Intelligence Platform (AIP), strict focus on margins, and success in both commercial and government sectors. But smell the coffee: despite these positives, Radke reinstated his $115 price target, suggesting possible downside of over 15%.
Wall street believes in a "Hold" consensus on Palantir, with the average target hovering around $95, foreshadowing a drop of more than 30% from the current market value.
Even though Citi remains one of the more optimistic Wall Street players on Palantir shares, the valuation jitters have everyone asking, "Can Palantir keep up this white-hot pace?"
[Source: Yahoo Finance & Reuters]
[1] https://finance.yahoo.com/news/palantir-stock-massive-decline-expected-155612038.html[2] https://www.reuters.com/business/finance/palantir-winds-down-market-madness-caps-advance-2021-03-26/[3] https://www.cnbc.com/2021/03/26/palantir-is-getting-valued-for-130-billion-based-on-cash-flow.html
PS: The author does not have any positions in Palantir (PLTR), GitLab (GTLB), or Nvidia (NVDA) at the time of publication.
[1] Given Cathie Wood's recent decision to sell off PLTR shares and the current valuation concerns, it might be worth investigating the potential of technology companies like GitLab or Nvidia, which could offer more reasonable valuations compared to Palantir.
[2] As advancements in artificial intelligence continue to drive investment opportunities in various sectors, a reevaluation of Palantir's current valuation seems necessary, given its high forward price-earnings ratio, to determine if it remains an attractive long-term investment option.
