Palantir Technologies (PLTR) stock has been climbing amid heightened investor enthusiasm around AI and the company’s strong momentum in government contracts. On Monday, PLTR is trading nearly 5% higher in pre-market hours. Let’s uncover what’s behind this gain.
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Here’s What’s Fueling the Surge
PLTR stock opened the week in the green as it recovered from an 11% drop on Friday. The previous session’s sharp decline was largely tied to the FTSE Russell index rebalancing, a widely anticipated event where fund managers adjust their portfolios to align with updated index compositions.
Notably, Palantir’s remarkable surge of over 400% since the last Russell reconstitution had positioned it for inclusion among the top 200 large-cap stocks in the Russell 1000. However, this upgrade triggered selling pressure from passive index funds adjusting to the new weightings, leading to Friday’s notable sell-off.
Adding to investor optimism on Monday, Palantir announced a strategic partnership with Accenture’s (ACN) subsidiary, Accenture Federal Services. As part of the partnership, both companies will work together to train 1,000 members of Accenture’s Data & AI team on Palantir’s Foundry and AI Platform (AIP). This will help them deliver advanced automation solutions to U.S. government agencies. Overall, the partnership aims to help U.S. government agencies use and grow AI tools, making their work faster and more modern.
Is Palantir a Good Stock to Buy?
Despite PLTR’s strong returns, investors remain committed to the stock thanks to its solid position in the fast-growing AI sector. Looking ahead, there’s still a strong belief that the company can turn its advanced AI tools into real-world solutions for both government and business clients.
Turning to Wall Street, analysts have a Hold consensus rating on PLTR stock, based on three Buys, 10 Holds, and four Sells assigned in the last three months. The average Palantir share price target is $104.27, which implies a potential downside of 20.25% from current levels.
