CNBC’s Mad Money host Jim Cramer shared his views on the post-earnings sell-off in Palantir Technologies (PLTR), which also dragged broader market indexes lower on November 4.
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Cramer, a long-time Palantir bull, said the short-term decline does not undermine his confidence in CEO Alex Karp or the company’s long-term trajectory. He recently lifted his price target from $150 to $200 amid strong AI-driven growth.
Strong Earnings but Surprising Decline
Palantir reported robust third-quarter results and issued upbeat guidance, supported by momentum in its Artificial Intelligence Platform (AIP). Despite these results, PLTR stock fell 8%, partly after news that Michael Burry’s Scion Asset Management had bought put options against both Palantir and Nvidia (NVDA), adding pressure on investor sentiment.
PLTR has a Complex and Misunderstood Business
Cramer acknowledged that Palantir is a complex and hard-to-classify stock because it operates in several areas like technology, AI, defense, and business consulting. Yet, he believes there is nothing wrong with Palantir, and that it just needs some time to settle down and match its market value.
He noted that many investors who viewed Palantir as their “north star” were shaken by its sharp drop after a strong quarter, leading to broad selling and short-term market anxiety. Cramer described Palantir as a highly profitable, fast-growing, and data-driven software company that defies simple categorization.
Wall Street Is Fixated on ‘Tech and Spec’ Stocks
Cramer argued that Palantir’s decline reflects Wall Street’s fixation on speculative tech and AI stocks, which often prompts exaggerated reactions. He believes the 8% drop had more to do with investor fear than with any weakness in Palantir’s operations.
The sell-off also weighed on broader markets. The Nasdaq 100 (NDX) fell 2.04%, the S&P 500 (SPX) declined 1.17%, and the Dow Jones Industrial Average (DJIA) lost 0.53%. Cramer criticized institutional investors for penalizing companies with reasonable valuations, especially the 334 S&P 500 components trading below 23 times earnings.
Cramer Is Bullish on Long-term Outlook
Cramer’s key message was that investors often develop “tunnel vision” around high-growth technology stocks, which can distort risk assessment and create unnecessary panic. He also admitted that while some stocks appear overpriced, many of their valuations make sense, though not all. Cramer concluded that the strong growth prospects of the Magnificent Seven, and eventually Palantir, support their current valuations and strategic importance in the evolving AI landscape.
Is Palantir a Good Stock to Buy Now?
On TipRanks, Palantir stock has a Hold consensus rating based on three Buys, 11 Holds, and two Sell ratings. The average Palantir price target of $185.20 implies 2.9% downside potential from current levels. Year-to-date, PLTR stock has surged over 152%.
