How will Palantir stock react to Q3 earnings report

The stock of Palantir Technologies (NYSE: PLTR) remains among market favorites despite recent concerns about overvaluation, and the upcoming earnings report could provide insights into the future movement of the equity.

PLTR recently reached a high of over $45 as its impressive 2024 rally continued. The stock has returned 152% year-to-date. As of press time, it was valued at $41.92, holding above the crucial $40 support level.

It is worth noting that Palantir’s rapid growth has raised red flags that the company might be pricing in future growth projections. To this end, analysts warn that the stock could plunge if some of these projections fail to materialize.

What to expect from Palantir’s earning report

Now, through its November 5 earnings report, Palantir can provide investors with future expectations. For the quarter ending September 2024, analysts expect Palantir’s revenue to grow 26.1% year-over-year to $703.7 million. Adjusted earnings are anticipated to reach $0.09 per share.

In this regard, market strategist Roy Mattox noted in a November 3 X post that the upcoming earnings report will be crucial. 

According to Mattox, PLTR’s implied volatility of 11% suggests a broad trading range, with the stock potentially swinging up to $49 or down to $35, depending on the tone of the earnings call and the company’s forward guidance.

Data shared by the strategist indicated that some investors have already taken profits, de-risking with a 35% gain ahead of the report. However, if the earnings call delivers strong results and drives the stock to new highs, there are plans to increase long positions aggressively. 

On the other hand, a weaker-than-expected report could lead to further selling, although a positive outcome might set a price target as high as $100 in a subsequent rally.

He also acknowledged that Palantir’s potential as an artificial intelligence leader is being scrutinized. While the company could position itself as a top “pure play” in AI, it faces the challenge of consistently delivering strong results, much like Nvidia’s success in the sector. 

“This stock is agnostic politically which makes it a great investment if their “commercial” business beats. We are huge, huge, fans of Alex Karp,” Mattox said. 

What to expect for PLTR stock 

Meanwhile, with the stock likely impacted by the earnings release, investment advisor Michael Vodicka pointed out in an X post that momentum indicators, such as the relative strength index (RSI), are signaling further growth. 

Vodicka noted that the RSI is at its most oversold level in six months. Historically, the last two instances of such low RSI levels led to notable rallies in the stock.

Overall, PLTR continues to show bullish sentiment. Its business remains strong, and recent additions to the S&P 500 index further boost investor confidence. The company’s AI advancements have raised its profile significantly.

Despite the general bullish sentiment around PLTR, analysts have varied views on its future. With the stock currently valued above $40, analyst Jake Ruth considers it “very expensive.” 

Despite expecting strong earnings, Mizuho’s Greg Moskowitz maintains a “sell” rating. Conversely, Mariana Perez of Bank of America (NYSE: BAC) has a target of $50 with a “Buy” recommendation.