Palantir Adds $17 Billion in Value in Best Week Since Debut

(Bloomberg) -- Palantir Technologies Inc. posted its best week since it went public in September, adding about $17 billion in market value as a broad rally in tech stocks helped fuel gains in the software maker.

Its shares rose 52% since Monday and touched a fresh intraday record at $33.50. The stock lost some of the gains on Friday after Citron Research said in a tweet it was shorting the stock with a $20 target. The company ended the session at $27.66.

Palantir representatives didn’t respond to a request for comment.

“A lot of institutions have probably warmed up to the company and are viewing it as something to hold onto for the long term,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services. “It’s a great software company, and it has a terrific business, a very sticky business, not just with governments but also enterprises.”

Trading in Palantir options also surged this week with average daily volume of call contracts jumping about 250% in the first three days of the week when compared to the prior week. An analysis of open interest shows most of the contracts being opened and closed in the same day, indicating a heavy presence of day traders.

After an initial lackluster performance following its direct-listing stock debut, gains for the Denver-based firm, which sells data-analysis tools, have accelerated after hedge funds, including Steve Cohen’s Point72 Asset Management, reported purchasing the company’s shares.

“Big-data companies have become very important and historically have been excellent stocks. Also, Palantir is benefiting from the pandemic -- tracking cases and analyzing data is right in its wheelhouse,” Kaufman said.

Since starting up in 2003, co-founder and chairman Peter Thiel has helped bankroll the business throughout its long period as a closely held business. Now, the stock has gained nearly 300% since its direct listing. It reported third-quarter losses in its first financial results since going public as compensation costs surged. It did, however, boost its revenue growth forecast for the year to 44%, exceeding the amount analysts expected on average.

“I’d say the days of it trading below $20 are probably over,” Kaufman added.

©2020 Bloomberg L.P.