Should You Buy the Dip in Palantir Technologies (PLTR) or Vertiv Holdings (VRT) Stock?

As the stock market shows some volatility, investors may be considering the right time to buy the dip in stocks like Palantir Technologies (PLTR) and Vertiv Holdings (VRT). Both companies have been among the top performers in the market over the last few years. Recently, a market downturn has prompted discussions about whether these stocks are still worth investing in.

Palantir Technologies: Recent Developments

Palantir Technologies experienced a decline, with its shares falling by 5% to $106 each on a recent Thursday. This downturn was influenced by announcements regarding defense spending cuts by the Trump administration. As Palantir primarily serves the U.S. government and intelligence community, changes in government spending can directly impact its business.

Despite this recent dip, there remains a lot of optimism around Palantir's long-term growth potential. The company has made significant advancements in machine learning and artificial intelligence, expanding its customer base beyond its traditional users. Recently, Palantir exceeded its Q4 expectations, and estimates for its earnings in fiscal years 2025 and 2026 have seen positive revisions. EPS estimates have risen by 12% and 18%, respectively, within the last month.

The company is expected to experience double-digit growth in both revenue and earnings for the foreseeable future. Currently, Palantir holds a “B” rating for Growth and “A” for Momentum in Zacks Style Scores. However, it also faces scrutiny due to its valuation, which has received a less favorable “F” rating for Value.

Palantir went public in 2020 and has achieved profitability with sales increasing rapidly. The company generated approximately $2.87 billion in revenue last year, and projections indicate that revenues could increase by 31% to $3.76 billion in FY25.

Vertiv Holdings: Market Position

On the other hand, Vertiv Holdings also saw a decline in stock price, dropping 3% to $104. Unlike Palantir, Vertiv’s dip is not directly linked to political policies but rather reflects broader market pressures. Like Palantir, Vertiv went public in 2020 and operates in the digital infrastructure space, providing solutions that ensure continuity of services, including hardware and software.

Recently, Vertiv also reported results that surpassed expectations, with projections indicating a 15% increase in sales for FY25 and FY26, potentially reaching near $10 billion. The company is currently profitable, with net income reported at $495.8 million in 2024, and forecasts indicate an EPS growth of over 20% in the upcoming years.

In terms of valuation, Vertiv has a Zacks Style Score grade of “D” for Value but is trading at a forward earnings multiple of 30.1, which is close to the average for its industry. It receives “A” for Growth and “C” for Momentum in the Zacks Style Scores, indicating solid growth potential despite some concerns regarding value.

Final Considerations

In summary, both Palantir Technologies and Vertiv Holdings may present potential opportunities for investors willing to take on some risk for possible high returns. With their recent dips in share price, they could be considered attractive buy-the-dip candidates. However, potential investors should weigh their growth prospects against their current valuations to decide if now is the right time to buy into these stocks.

stocks, investment, analysis