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Here's Why Palantir Technologies Stock Sank 17.6% Last Month

By Keith Noonan – Aug 6, 2021 at 10:29AM

Key Points

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Palantir stock is now down roughly 4% year to date.

What happened

Shares of Palantir Technologies (NYSE: PLTR) sank 17.6% in July, according to data from S&P Global Market Intelligence. Despite debuting a new product offering for its Foundry data analytics platform and announcing continued collaboration with the U.S. government on vaccine distribution projects, the stock lost ground amid market volatility.

PLTR Chart

PLTR data by YCharts

July was a strong month for Big Tech stocks, including Alphabet, Apple, and Microsoft, but many growth-dependent and more speculative stocks in the sector saw their valuations dinged. With concerns related to faster-than-anticipated inflation and the coronavirus delta variant, investors shied away from riskier tech stocks, and Palantir ended the month down double digits as a result of these trends.

People looking at computer screens.

Image source: Getty Images.

So what

Palantir published a press release on July 20 announcing the launch of Foundry for Builders, a new addition to its core Foundry platform tailored to businesses in early growth stages. The company also published a press release on July 26 announcing that it would continue working with the U.S. Department of Health and Human Services to support vaccine distribution for another year. While these announcements show that the company is continuing to roll out new features for enterprises and win support from government institutions, the broader market trend of investors selling out of growth-dependent tech stocks overshadowed those developments and was the biggest factor in Palantir's stock performance last month.

Now what

Palantir stock has regained some ground early in August's trading. The company's share price is up roughly 3.7% in the month so far.

PLTR Chart

PLTR data by YCharts

Palantir is scheduled to report second-quarter earnings results before the market opens on Aug. 12. The company has a market capitalization of roughly $42.3 billion and is valued at 28.5 times this year's expected sales.

Palantir is not yet profitable and certainly has a growth-dependent valuation, but the company has avenues to living up to and far exceeding its current valuation. Data analytics is going to be one of the biggest keys to public- and private-sector success in the coming decades, and Palantir has emerged as an early leader in its corner of the industry. The stock probably isn't a great fit for investors without relatively high risk tolerance, but it could go on to deliver market-crushing returns for patient investors who are willing to embrace potential volatility.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Microsoft, and Palantir Technologies Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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