- Palantir stock sank as much as 14% on Friday before mounting a slight recovery.
- The fall extends the big data firm’s slide to over 45% since hitting a record high share price on Jan. 27.
- Despite the fall, Cathie Wood’s ARK ETFs have continued to add exposure as the share price pulled back.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Palantir stock sank as much as 14% on Friday continuing its downward spiral since hitting record highs of $US39 ($51) per share on Jan 27.
The Denver-based big data firm is now down more than 45% in a little over a month.
A surprise quarterly loss in the company’s fourth-quarter earnings results released in mid-February didn’t help either.
And now tech stocks are selling off amid rising Treasury yields as investors rotate out of the highly valued tech sector to more cyclical value names in financials and energy.
Despite the negative news, some institutional investors are using the fall in share prices as a buying opportunity. Two of Cathie Wood’s ARK exchange-traded funds added over 2.6 million shares of Palantir on Wednesday.
The purchase followed a February addition of some 6.8 million shares of the big data firm for Wood’s ARK Innovation ETF and ARK Next Generation Internet ETF.
On Friday the company signed yet another deal, this time with Amazon Web Services to provide Enterprise Resource Planning (ERP) systems “that enables rapid integration and analysis of data” for customers.
Goldman analysts argued Palantir’s recent quarterly results showed signs of “sustainable growth” and issued a “buy” rating and $US34 ($44) price target for the big data firm. The analysts noted the significant backlog of deals in their report, some of which we have seen go through over the last month.
Overall though, analysts have become increasingly bearish on Palantir, often citing its stretched valuation. The company holds three “buy” ratings, three “neutral” ratings, and five “sell” ratings from analysts.