Mixed Signs for Palantir Stock After Shares Soared

America’s largest bank, JPMorgan, bought a call option on a significant amount of Palantir (US:PLTR) stock last quarter, and PLTR stock has soared in recent weeks amid the market’s interest in the company’s work with artificial intelligence.

That looks contrarian when we look at the recent put /call ratios data compiled by Fintel, which suggest that investors’ sentiment toward PLTR stock is largely bearish And while a meaningful number of large, well-known financial institutions besides JPMorgan bought significant amounts of Panatir’s shares last quarter, many such institutions  also unloaded large  bundles of PLTR stock in Q1.

Also noteworthy is that, despite developing data analysis tools since its founding in 2003, Palantir is barely profitable.

Palantir was founded in 2003, but the company is just barely in the black. Specifically, its net income last quarter came in at just $17 million. And last year, it reported an operating  loss of $161.2 million.

The firm anticipates that it “will remain profitable” for “each” of the last three quarters of 2023, but it did not specify how much profit it expects to generate during that period.

JPM’s Purchase, PLTR’s Rally

On May 18, JPMorgan reported that it had acquired a call option on 391,197 shares of PLTR in the first quarter.

Two weeks later, PLTR closed out May up 89% for the month, extending the 130% year-to-date gain.

Palantir, which utilizes AI, appears to be rallying because of the market’s fascination with the technology. The company itself  seems to be seeking to become more closely associated with AI in investors’ minds.

On Palantir’s first-quarter earnings call, held on May 8, the company mentioned the term “artificial intelligence”  58 times. And on May 26, the company announced that it would hold a “customer conference” to discuss its AI tool, Palantir AIP. The conference is slated to take place on June 1.

Heading into the end of May, put-call ratio for PLTR stock options was looking quite bearish. On May 25, the ratio stood at 1.14. That rose to 1.38 on May 26. And by May 30, the ratio clocked in at 1.38. That increasing trajectory further away from the bullish/bearish threshold  of 1 tells us that investors are becoming increasingly pessimistic about the outlook for PLTR stock.

Major Purchases and Sales by Top Institutions

As noted earlier, a significant number of large, well-known institutions reported having bought significant amounts of shares of PLTR stock in Q1, but many other such institutions noted that they had sold large amounts of the stock.

In Q1, Rockefeller Capital Management reported having bought 587,883 shares of PLTR,  UBS acquired 402,333 shares, and Northern Trust obtained 412,639 shares. Further, T. Rowe Price added 48,000 shares, Deutsche Bank acquired 200,431 shares, the State of Wisconsin Investment Board added 42,280 shares, and Bank of America obtained a huge 2.278 million shares.

Among the major institutions selling PLTR stock last quarter were New York State Common Retirement Fund, which unloaded 35,500 shares, Canada Pension Plan, which reduced its stake by 12,578 shares, and Royal Bank of Canada, which unloaded 122,778 shares of the stock. Further, Morgan Stanley sold  a huge 3.143 million shares, AllianceBernstein dumped 487,498 shares,and Jefferies Financial parted ways with 223,151 shares.

This article originally appeared on Fintel

By Larry Ramer