Investment Insights - Palantir Technologies Inc. (PLTR)

START - $180.40 | FINISH - $221

1. HORIZON: 0 - 4 months (Short-Term)

2. FROM: 15 January 2026 | UNTIL: 15 May 2026

3. MANAGEMENT ASSESSMENT: 22.50%% growth

4. RECOMMENDATION: BUY

5. PROJECTION BASED ON: R25 000

TRADING PLAN

●     Potential entry: Consider initiating a position after the stock establishes a close above the $180.40 level.

●     Risk management: A protective stop loss should be placed at approximately $165.46, which limits the potential loss to around 8.40% from the entry point.

●     Profit target: The primary price target sits at $221, representing a potential gain of 22.50% from current price levels.

WHY THESE SHARES HAVE POTENTIAL FOR PROFIT

●     Explosive growth in business customers

Palantir is experiencing strong growth in selling its software to regular businesses in America. In Q3, the revenue from U.S. commercial customers grew 121% compared to the same period last year, reaching $397 million. This growth is driven by companies adopting Palantir’s AI platform, called AIP, to help them make better decisions using their data.

●     Profitable business with strong cash generation

Unlike many fast-growing tech companies that lose money, Palantir is extremely profitable. In Q3 2025, the company achieved a 45% profit margin on its operations, meaning that for every dollar it earned, it kept 45 cents as profit. The company also generated $540 million in free cash flow during the quarter; this is actual cash the company can use to invest, return to shareholders or save. This combination of rapid growth and high profitability is rare and highlights the strength of Palantir’s business model.

●     Record number of large contracts

Palantir is not just winning more customers; it’s also closing bigger deals. In Q3, the company signed contracts worth a total of $2.76 billion, 151% more than the same quarter last year. The company closed 204 deals worth at least $1 million each, with 53 deals worth at least $10 million. This shows that major organisations are committing budgets to Palantir’s platforms, indicating strong confidence in the value the company provides.

TECHNICAL INDICATORS

The technical picture for Palantir suggests that the long-term uptrend remains intact, with key indicators pointing toward a potential resumption of bullish momentum.

●     Long-term trend remains bullish

The stock price is currently trading above its 200-day simple moving average (SMA), which is a widely recognised indicator of a healthy long-term uptrend. This positioning confirms that the bulls remain in control of the primary trend and that the stock has strong underlying support.

●     Awaiting confirmation of trend continuation

The critical level to watch is the 50-day SMA. A decisive close above this medium-term moving average would serve as strong confirmation that the recent consolidation or pullback is complete and that the uptrend is ready to continue. This breakout would signal that short-term momentum is aligning with the long-term bullish structure and will be a close above the entry price.

●     Momentum shift on the horizon

The MACD (moving average convergence divergence) indicator is poised for a bullish crossover, where the MACD line is about to cross above its signal line. This pending crossover suggests that downward momentum is exhausting and upward momentum is building. Once this crossover is confirmed, it would provide additional technical support for the bullish case.

RISKS

●     Extremely high valuation

Palantir’s stock is very expensive relative to its earnings. It trades at a Price-to-Earnings (P/E) ratio of over 415, whereas the average for other big tech companies is closer to 35. This high price means that the market has extremely high expectations for future growth. If the company fails to meet these high expectations, even with good results, the stock price could fall sharply.

●     Heavy reliance on a few large customers

A portion of Palantir’s revenue comes from a small number of large clients, particularly government agencies. Historically, its top 20 customers have accounted for over 60% of its revenue. This concentration is a major risk because the loss of even one or two of these key contracts could have a substantial negative impact on the company’s financial results. Government contracts can also be unpredictable and are subject to changes in political priorities and budgets.

●     Intense competition from tech giants

Palantir operates in the highly competitive AI and data analytics market. It faces competition from some of the largest and most well-funded companies in the world, including Microsoft, Google, and Amazon. These competitors have resources and established customer relationships, which could make it difficult for Palantir to maintain its growth and market share over the long term.

SOURCES

●     Palantir Q3 Earnings Report

●     Risks That Palantir Stock Investors Must Know

●     Palantir Competitors: Understanding Alternatives to Gotham and Foundry

Disclaimer:
*Any opinions, views, analysis, or other information provided in this article is provided by BROKSTOCK SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BROKSTOCK SA does not warrant the correctness, accuracy, timeliness, reliability, or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions, and all decisions are made at your own risk. BROKSTOCK SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss, including, without limitation, any loss of profit which may arise directly or indirectly from the use of the market commentary. The content contained within the article is subject to change at any time without notice. BROKSTOCK SA is an authorised financial services provider - FSP No. 51404. T&Cs and Disclaimers are applicable: https://brokstock.co.za/
** This article was prepared by BROKSTOCK analyst Maboko Seabi