Everyone Loves Palantir, but Where's the Love for This Similarly Impressive Name?
Both companies have provided outstanding returns over the past year.
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What can be said about Palantir PLTR that hasn’t already been said? After crushing earnings and revenue estimates earlier this week, the stock ascended to triple digits for the first time in its history.
To appreciate the phenomenon that is Palantir, consider that the stock has gained 40% since I made this buy recommendation less than three weeks ago (green arrow). Palantir has gained 275% since my initial recommendation in September.
Of course, my colleague Sarge Guilfoyle recommended buying this stock much earlier, so let’s give credit where it’s due. Palantir has gained nearly 500% over the past 52 weeks, and nearly 990% over the past five years.
On Tuesday, Palantir shares roared higher on heavy volume (red arrow). This is an indication that the stock's post-earnings rally may have staying power, as institutional investors add to their positions.
Does the huge gap left in the wake of this move pose a problem for traders? There is a school of thought that believes all gaps will eventually be filled.
If you look at the chart above, you’ll notice gaps in August, September and November that have yet to be filled. Those gaps appear to be small now, but that wasn’t the case when they occurred. Someday, the current gap may look small, if the stock can continue its amazing run.
Speaking of amazing runs, Spotify SPOT has once again reached an all-time high. Spotify vaulted 13% on Tuesday, as the online music streamer reported its first profitable year.
Like Palantir, Spotify has yielded impressive gains. Since my initial recommendation just over a year ago, shares of the Stockholm, Sweden-based streamer have tripled in value.
Also similar to Palantir is the huge gap that formed after this week’s earnings report. Again, previous gaps from November and July look small in comparison, but if the stock continues to run, the current gap will appear to have shrunk.
In the just-ended fourth quarter, Spotify gained 35 million monthly active users, raising its total to 675 million Spotify monthly active users.
In a side-by-side comparison, the charts of Palantir and Spotify have many similarities. Both stocks have gapped higher after pulling back to their respective 50-day moving averages (blue).
I understand the love everyone is feeling for Palantir. The company seems to have endless potential, and the stock has been a massive winner.
But let’s not sleep on Spotify. Spotify continues to dominate the music streaming landscape, and its share price reflects that reality.
At the time of publication Ponsi was long long PLTR and SPOT.
