Palantir Technologies (NYSE:PLTR) stock has tread water in recent weeks. Following a successful earnings release, PLTR stock surged and then pulled back. There is one factor that could lead to some volatility, otherwise expect this popular AI play to continue delivering a sideways performance, staying not too far from the $17.50 per share price target.
In a little over a month, on Feb. 13, this stock could make a significant move in either direction. That’s when the company next reports quarterly results/updates to guidance. If Palantir can convey that growth and/or demand are accelerating, it could have bullish impact on sentiment.
If the latest outlook doesn’t convey this message, this bumpy ride of a stock could get a whole lot bumpier.
PLTR Stock and the Immediate Term Forecast
Major macro developments can influence Palantir’s short-term performance. Further “big news” on economic issues like interest rates could drive big moves for the market.
In turn, driving a sharp upward or downward move for PLTR stock. Although more company-specific news (such as contract wins) could provide small temporary boosts, I wouldn’t expect news of that nature to be what sends Palantir back above $20 per share.
While another wave of “AI mania” could always crop up, trying to time when this exactly happens is a lot easier-said-than-done.
The earnings release will likely drive PLTR’s next big move. In this release, Palantir will unveil results for Q4 and the full-year 2023, as well as provide updates on the coming year’s outlook.
The jury’s still out regarding growth in the coming quarters. Palantir keeps crushing it with its governmental business. Plus, management revealed some promising data about commercial growth in the last quarterly earnings release. Still, weakness in certain areas could be a drag on overall operating performance.
A Make or Break Moment
As hinted above, PLTR stock could really take off again, if the upcoming earnings release is as well-received as the preceding earnings release. Shares surged due to better-than-expected revenue and earnings, as well as anticipated growth in the company’s commercial business.
While Palantir’s commercial revenue grew 33% year-over-year during Q3, commercial customer count went up by 37%. This may be a forward indicator of increased growth ahead. Yet while Q4 results could help bolster the bull case, a lot could still happen that bolsters the bear case instead.
For instance, in my last PLTR article, I discussed how Palantir is struggling to gain ground in the European public-sector defense market.
Also, even if accelerating customer growth means accelerated commercial revenue growth during Q4, subsequent customer growth data may signal a growth plateau/slowdown is on the horizon.
It’s an understatement to say how much indications of growth deceleration could impact price performance.
Arguably “Priced for perfection” at 69.4 times estimated 2023 earnings, any lackluster aspect of the results would likely seriously sink Palantir stock.
Before the Next Big Move, Here’s the Best Move
So, if earnings could result in PLTR surging or sinking in a big way, what’s the best move for investors today? As before, it all depends on your situation/your current relationship with Palantir shares.
If Palantir is already in your portfolio, there’s no immediate reason to bail ahead of earnings. Even if the stock encounters another round of volatility, long-term trends (mass adoption of AI-compatible software by big business and big government) point to PLTR ultimately climbing to much higher prices.
If you’ve yet to buy PLTR stock, and are confident in the long-term bull case, there’s no reason to fear cautious purchases of the stock, preferably on weakness. Any post earnings sell-off could even serve as a perfect opportunity to build up a position.
Otherwise, if you fit into neither of these categories, less-risky opportunities may suit you better.
PLTR stock earns a B rating in Portfolio Grader.
On the date of publication, Louis Navellier had a long position in PLTR. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.