“Ominous day” coming to stocks… (From Trend Labs)
Quick Look
- Rising institutional ownership in Palantir stock signals growing confidence despite valuation concerns.
- Strong earnings growth and improving analyst price targets suggest PLTR stock could outperform the broader market, even as growth rates normalize.
- Technical indicators point to short-term caution ahead of earnings, but long-term sentiment remains bullish as institutions continue accumulating shares.
When many investors talk about Palantir Technologies Inc. (NASDAQ: PLTR), they’ll point to a price-to-earnings (P/E) ratio of over 550x and a price-to-sales (P/S) ratio that is over 142x. These numbers support the idea that PLTR stock is overvalued. However, there’s another number that suggests the opposite may be true.
That's institutional ownership. This is a dynamic number because it’s based both on the number of shares outstanding and the number of shares owned by institutions. Both numbers change daily, but the data is usually only reported in terms of months.
For example, Palantir's ownership on MarketBeat puts institutional ownership of PLTR stock around 45.65%. That’s a rounding error to 50% ownership. Other sites have ownership of around 52% or even as high as 56%.
The key thing to note is that it has shot up sharply in the last 12 months, with buyers more than doubling sellers. Some of that buying is due to Palantir’s inclusion in both the S&P 500 and the NASDAQ 100.
Some, but not all. Palantir has delivered strong earnings reports that back up the idea that this is a must-own stock in the ever-changing technology sector.
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Growth Is Slowing, But Still Strong
One objection to Palantir stock’s lofty valuation is that much of the company’s future growth is already fully priced in. Palantir reports earnings on Feb. 2. Analysts are forecasting earnings per share of 23 cents on revenue of $1.34 billion. Those numbers would be approximately 90% and 61% higher year-over-year.
However, in the next 12 months, those numbers are forecast to drop to approximately 39% and 33% respectively. That’s still impressive growth, but it gives credence to the “growth is fully priced in” narrative.
This is another reason to pay attention to institutional buying. It tells you that institutions believe PLTR stock will outperform the broader market, and they’re making sure they’re positioned for that growth.
That outlook may be supported by the “whisper number,” which suggests Palantir’s earnings in its upcoming earnings report will come in at 27 cents, or 17% above the consensus target.
Consensus Price Target Has Been a Reliable Signal
As institutions have piled into PLTR stock, its consensus price target has moved higher, and not just by a little bit. One year ago, the stock’s consensus price target was around $43.78, which suggested a 39% downside.
That never happened. In fact, the stock is up over 134% in the last 12 months. Today, the consensus price target is $175.88, suggesting PLTR stock has an upside of nearly 4%.
The story gets better. The Palantir analyst forecasts on MarketBeat show bullish sentiment continuing to build. Citigroup Inc. (NYSE: C) upgraded the stock from Neutral to Buy and raised its price target to $235 from $210. Truist Financial Corp. (NYSE: TFC) also initiated coverage with a Buy rating and a $223 target.
That suggests PLTR stock could post price gains of over 30% in the next 12 months, which will almost certainly beat the market. That will be part of a virtuous cycle that will keep institutions buying.
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PLTR Chart Suggests Caution Before Earnings
At the close of trading on Jan. 20, PLTR stock slipped a fraction below its 150-day simple moving average (SMA) of around $169. The 150-day SMA has been acting as a level of support since mid-November. The concern is that near-term momentum in the stock, which is down about 4.8% in the first couple of weeks of 2026, will continue into earnings.
The stock is down from the all-time high it reached in November, and buyers have failed to defend previous resistance in support zones. This trend suggests investors are being more cautious than looking to aggressively accumulate before the report. Further support for this trend is that volume has remained moderate on the stock’s recent down days.
IF PLTR stock were to drop decisively below the 150-day SMA, the next level of support could be around $152. The MACD line is below the signal and near the zero axis, confirming waning upside momentum and a mildly bearish short-term bias before earnings.
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