Palantir Stock Tests $161 Support as Nvidia Partnership Strengthens Sovereign AI Story

TradingKey - Palantir closed at $165.86 on Thursday, September 10th, a 2.16% drop and almost exactly matching our reference price of $165.87. The stock has switched from the resistance zone of $188.23 to the $159.61-$166 zone of support, aromatic support with a rising trendline and the 38.2% Fibonacci retracement. The recent development on Thursday, September 10 at AIPCon 11 created Palantir-Nvidia’s expansion of their partnership to include the creation of sovereign AI and supply chain intelligence. The AI stack is being deployed first within Nvidia’s own supply chain. As always, execution remains strong for the company, but valuation and the rising bond yields still remain counterbalances.

AIPCon 11 Put Sovereign AI at the Center of the Story

On September 10, both companies announced a deeper partnership. Palantir’s Foundry and AIP tools will be used with Nvidia’s Nemotron open AI models. The platforms are geared toward the complex supply chains and will begin with Nvidia’s own supply-chain operations.

This customer partnership creates a new dimension. Nvidia manages one of the most complex supply chains in the world. Its supply chain spans millions of parts and thousands of suppliers, with about 1.3 million parts in each Vera Rubin rack. If Palantir can prove the software, the partnership will go beyond a typical marketing partnership.

The partnership will extend into manufacturing, pharmaceuticals, ag, retail, tech, and gov. Nvidia says the architecture can also be applied across agriculture, manufacturing, pharmaceutical, retail, technology and government supply chains. This further strengthens Palantir’s positioning as the other connecting layer of AI technologies with enterprise data and workflows.

Sovereign AI Is Becoming a Distinct Growth Theme

AIPCon 11 confirmed Palantir’s focus on sovereign AI. Sovereign AI means that companies and governments get to decide where their models, data, compute, and IP reside, rather than relinquishing them to external AI service providers.

This framing is very much applicable to defense, banking, health care, manufacturing, and other sectors involving a high degree of compliance and security concern, where model performance may not be the only deciding factor.

Palantir has expanded this sphere of control through Nebius and Fujitsu. Nebius was named Palantir’s preferred sovereign AI infrastructure partner on September 8, while Fujitsu deepened its partnership with Palantir on September 10 as a Global FDE Partner. The opportunity is clear: if more and more enterprises show a preference for private or on-premises AI controls, then Palantir can very well become the software integrator that ties these control systems together, regardless of which model provider is chosen.

Q2 Growth Remains Extraordinary

Palantir Technologies has once again reported impressive financial results, solidifying its position among the fastest growing software companies. Palantir reported Q2 revenue of $1.935 billion, representing a 93% growth from the year prior. U.S. revenue also grew 115% to $1.573 billion. U.S. commercial revenue increased by 149% to $764 million.

Adjusted operating income amounted to $1.194 billion, resulting in a margin of 62%, while adjusted free cash flow amounted to $1.220 billion, also at a margin of 63%. Palantir finished the quarter with $9.2 billion of cash, cash equivalents, and short-term U.S. Treasuries.

The combination of hypergrowth and profitability is impressive. Palantir is evidently not sacrificing margin growth in order to grow. A Rule of 40 score of 155% is exceptionally impressive for a company the size of Palantir.

Commercial Momentum Is Becoming the Main Engine

Palantir closed 220 deals worth at least $1 million in Q2, including 73 deals worth at least $10 million. U.S. commercial total contract value increased 153% to $2.132 billion. Additionally, U.S. commercial remaining deal value increased 124% to $6.238 billion.

These new numbers shift an old argument that sees Palantir primarily as a government and defense contractor. Palantir's U.S. government revenue grew by 90% to $809 million. However, the adoption of AIP revenue, which leads to growth of Palantir's commercial business, is a greater revenue driver.

AIP Evolve Pushes Palantir Deeper Into Agentic Workflows

An update to Palantir’s product suite, AIP Evolve, is now generally available, as of September 8. AIP Evolve coordinates fleets of AI FDE agents to propose and implement improvements to enterprise AI systems, subject to human review and validation before changes are merged. While initial automation and task deployment products rely on the engagement and validation of human operators, Palantir is positioned to operate in the next market segment with their new product.

Operating in the next market segment involves moving to Palantir’s agentic workflows. If enterprises move beyond simply interacting with bots and progress to a world where the majority of decisions and processes are automated, Palantir’s opportunities may expand significantly.

Valuation Is Still the Biggest Risk

The business story is strong, but stock valuation still has the company priced at the cusp of the big execution. By September 10, Palantir traded at around $166, with a market cap at around $400 billion, and trailing 12-month revenue at around $6.2 billion.

This gives the shares a multiple of over 60 times revenue which is extremely high and makes shares highly vulnerable to a slowdown in growth or increase in discount rates. The U.S. 10-year yields approached 5% and high duration tech stocks generally have their valuation pressured by increasing risk-free yields.

This explains why PLTR dropped more than 2% on September 10 even with the Nvidia announcement. The market has shifted to a “show me” mentality and Palantir will need extraordinary delivery to justify an extraordinary multiple.

Palantir Technical Analysis: $159.61-$161.36 Is the Key Support Cluster

Palantir closed trading at $165.86 on September 10 which was essentially at the $165.87 reference point after a sell-off from the $188.23 resistance area. Price is currently testing a key confluence zone at $161.36-$166 which combines the 38.2% Fibonacci retracement and upward trend line.

Palantir Stock Price Chart - Source: Tradingview

Price is currently trading within a bullish consolidation zone with the backing of the major $159.61-$161.36 support cluster. This means the overall recovery frame has not been broken. Should this consolidation zone hold, price has the potential to retrace and touch the $171.56-$171.62 zone, followed with an improves structure and upward breakout of the $188.23 zone, followed by a larger potential ascending target at $207.54. RSI is around 39 and below its signal line near 47, confirming bearish short-term momentum.

A decisive breakdown of $159.61 becomes more bearish as it breaks both Fibonacci and trend line support. This would subsequently expose $153.06 and the $144.73-$144.76 support zone.

Key Levels

·       Latest completed close: $165.86

·       Key support cluster: $159.61-$161.36

·       First rebound target: $171.56-$171.62

·       Major resistance: $188.23

·       Higher target: $207.54

·       Secondary support: $153.06

·       Deeper support: $144.73-$144.76

·       RSI: Around 39, bearish short-term momentum

Why is Palantir stock in focus now?

Palantir’s latest catalyst is the announcement of their partnership with NVIDIA at AIPCon 11. The expanded partnership was announced September 10 and centers on sovereign AI and supply-chain intelligence, starting with Nvidia’s own operations. This is in addition to their 93% revenue growth and 149% growth in commercial activity in the U.S. They also showed exceptional margins in their operations and free cash flow.

What level confirms further PLTR upside?

A sustained 4-hour close above $171.62 confirms buyers in control and an opportunity to test $188.23 and $207.54.

Bottom Line

Palantir is one of the better performing companies and their partnership with NVIDIA strengthens their case of Foundry, AIP and Ontology as enterprise and sovereign AI infrastructure. Valuation is the main concern rather than business momentum. I would be bullish taking trades above $159.61-$161.36. I would avoid taking new long positions below that, as it would likely serve to continue the downtrend and test $153.06 and $144.76.