Why Palantir Technologies (PLTR) Stock Is Trading Higher Friday

Palantir Technologies Inc (PLTR) shares are trading higher Friday morning following Federal Reserve Chair Jerome Powell's unexpectedly dovish comments at Jackson Hole, which signaled that interest rate cuts may soon be on the table as labor market risks mount.

What To Know: For growth companies like Palantir (PLTR), lower interest rates can be a powerful tailwind. The valuation of high-growth firms depends heavily on future earnings and cash flows, which are discounted back to the present using prevailing interest rates.

When rates fall, those future earnings look more valuable today, supporting higher stock prices. Powell's comments that the Fed "may warrant adjusting policy" if downside risks to employment intensify were widely interpreted as opening the door to rate cuts in September.

Read Also: Palantir’s 70x Revenue Valuation May Be Unsustainable Despite ‘Outstanding Q2 Results’ ? Citi Analyst Warns Company’s ‘Edge’ May Fade As AI Expands

What Else: Palantir (PLTR), which invests heavily in expanding its artificial intelligence platforms and securing new government and commercial contracts, is particularly sensitive to borrowing costs and the market's discount rate.

As Treasury yields decline, investors are more willing to pay up for companies with long growth runways, since the opportunity cost of holding growth equities versus bonds diminishes.

For Palantir (PLTR) investors, the Fed's dovish pivot offers a double boost: lower discount rates that support valuations and a macro backdrop that may heighten demand for the company's AI-driven solutions.

Price Action: According to data from?Benzinga Pro, PLTR shares are trading higher by 3.37% to $161.40 Friday morning. The stock has a 52-week high of $189.46 and a 52-week low of $29.31.

Read Also: 10 Stocks Rocketing After Powell’s Dovish Shift

How To Buy PLTR Stock

By now you're likely curious about how to participate in the market for Palantir Technologies (PLTR) – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

In the case of Palantir Technologies (PLTR), which is trading at $162.34 as of publishing time, $100 would buy you 0.62 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

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