Why Palantir Stock Soared 4.7% Today

Core Viewpoint - Palantir Technologies' stock experienced a rebound due to a softer-than-expected inflation report, which raised market expectations for potential interest rate cuts by the Federal Reserve [1][2]. Group 1: Stock Performance - Palantir's shares rose by 4.73%, closing at $8.38, recovering most of the previous day's decline [1][2]. - The overall market also saw gains, with the S&P 500 and Nasdaq Composite increasing by 0.7% and 1.3%, respectively [1]. Group 2: Inflation Impact - The Bureau of Labor Statistics reported an annual inflation rate of 2.7%, which was below the anticipated 3.1%, positively affecting speculative stocks like Palantir [2]. - The lower inflation figures increased the likelihood of the Federal Reserve cutting interest rates, encouraging investors to take on more risk [2]. Group 3: Valuation Concerns - Palantir's valuation is considered a significant concern, with a price-to-earnings (P/E) ratio exceeding 400 and a price-to-sales (P/S) ratio over 115, indicating extremely high valuations [4]. - Despite the company's successful business growth, there are doubts about whether it can justify its current valuation levels [5].