Palantir Becomes an Unlikely Darling of the GameStop Crowd

Even a powerful crystal ball couldn’t have foreseen this.

On Thursday, as the GameStop saga moved officially into the halls of Congress, the crowd that has been favoring the videogame retailer turned its eye to Palantir Technologies —a Denver-based software company named for such a magical element in the “Lord of the Rings” saga. Palantir spent the day as a top trending stock on Reddit’s WallStreetBets forum—coming in second only to GameStop—according to

The two have little in common. Until relatively recently, GameStop was one of the most beaten-down stocks on Wall Street, due to widespread belief that its days were numbered. Palantir by contrast has been the hottest in a batch of popular software companies that went public last year. By the end of last week, Palantir’s share price was up 340% from the reference price on its direct listing on Sept. 30 and 236% above the closing price of its first trading day, showing that most of its gains didn’t come from the infamous first-day pop. Snowflake and —both of whose share prices more than doubled on their first trading day—have picked up an additional 18% and 66%, respectively, from their first-day close.

Then came Palantir’s fourth-quarter results Monday morning, which investors found disappointing mostly due to a forecast implying a significant deceleration in revenue growth later this year. That took nearly 13% off the stock that day. Another big drop came Thursday, as more than 383 million of the company’s shares were freed from a post-IPO lockup provision. By midday, trading volume on Palantir was more than triple the stock’s daily average since the start of the year, according to FactSet data.

The selloff seems to have signaled a buying opportunity to online punters. Unlike GameStop, Palantir hasn’t been a big target of short sellers. But it does bring a whiff of controversy due to its national-security work, which in turn has led the company to depict itself as a Silicon Valley outcast. It also brings a loose association with Elon Musk—patron saint of the Reddit crowd—given that Palantir was co-founded by his former business partner Peter Thiel.

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