Jim Cramer: Palantir Stock Defies Classification, Remains Fairly Valued Despite 8% Drop
On November 4, Jim Cramer, host of CNBC’s Mad Money, addressed the recent post-earnings slump of Palantir Technologies (PLTR). The decline caused wider market indices to drop, raising concerns among investors.
Palantir Experiences After-Earnings Sell-Off
Despite robust earnings and positive guidance, Palantir’s stock fell 8%. Cramer, a long-term supporter of the company, remains confident in its future under CEO Alex Karp. He recently updated his price target for Palantir from $150 to $200, citing strong growth driven by artificial intelligence.
Analyzing the Earnings Report
- Palantir reported strong third-quarter financials.
- Guidance reflected momentum in its AI Platform.
- The stock decline was influenced by investor sentiment following news of Michael Burry’s Scion Asset Management acquiring put options against Palantir and Nvidia (NVDA).
Understanding Palantir’s Complexity
Cramer emphasized that Palantir is difficult to categorize due to its operations across technology, AI, defense, and consulting sectors. He believes that the company is not facing fundamental issues but instead requires time to align its market value.
- Investors saw Palantir as a reliable investment but were unsettled by the stock’s sudden drop.
- The company is characterized as highly profitable and fast-growing.
Market Reactions and Trends
Cramer pointed out that Wall Street’s focus on speculative technology stocks often leads to exaggerated market reactions. He attributes the recent 8% stock drop more to investor fear than to weaknesses within Palantir.
The broader market also felt the impact of this decline:
| Market Index | Decline Percentage |
|---|---|
| Nasdaq 100 (NDX) | 2.04% |
| S&P 500 (SPX) | 1.17% |
| Dow Jones Industrial Average (DJIA) | 0.53% |
Long-Term Outlook for Palantir
Cramer articulated that investors tend to develop “tunnel vision” on high-growth tech stocks, distorting risk assessment. While he acknowledged that some stocks might be overpriced, many valuations, including Palantir’s, are justified based on growth forecasts.
According to TipRanks, Palantir stock currently holds a Hold consensus rating, derived from three Buys, 11 Holds, and two Sell ratings. The average price target stands at $185.20, indicating a potential downside of 2.9% from current levels. Year-to-date, Palantir’s stock has surged over 152%, reflecting its strong growth potential.
