Riding the continuing tsunami of artificial intelligence, Nvidia (NVDA) soared back onto this month’s list of new buys by the best mutual funds. And while Palantir (PLTR) disappeared from this screen in June, fellow defense, intelligence and AI player Parsons (PSN) stock remains on these savvy investors’ radars as it explores a new breakout.
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Nvidia stock has come on and off this elite screen this year. Both Palantir and Parsons, on the other hand, landed on this list every month this year — until Parsons went AWOL in June.
As Nvidia’s stock value gets debated but finds support after a recent rash of selling, Parsons and Palantir are both crafting new bases. On Thursday, Palantir stock popped nearly 5%, while Parsons came off earlier lows to gain just under 1%.
Friday’s negative reversal on the Nasdaq dragged on Parsons and Nvidia, with both posting a small loss. Palantir managed to eke out small gains.
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AI In Orbit: Parsons, Palantir Explore Buy Points
Parsons is working on a second-stage cup pattern showing an 86.44 buy point. With the relative strength line gaining steam, Parsons ended Thursday’s action 4% below the buy point. With a slight dip on Friday, shares of PSN closed the week 5% shy of that mark. But Parsons rose over 4% for the week, closing in the upper half of the week’s price range.
A breakout would mark an all-time high for Parsons, which had its initial public offering in 2019.
Parsons stock popped back above its 50-day moving average on June 18 and has continued to climb. The 21-day exponential moving average stands poised to cross back above the longer-term 50-day line, which would signal another sign of rising technical strength.
Palantir was featured in this column on June 7 as it targeted an early breakout past a trend line entry around 24. Palantir stock has cleared that buy point as it now takes aim at an irregular entry in a third-stage base. The conventional buy point for the IBD 50 stock is 27.50. Palantir may also investors an earlier entry at 26.57.
Parsons Turns 80, Keeps Innovating
Founded in 1944, Parsons is celebrating its 80th anniversary. Calling itself a “digitally enabled solutions provider,” Parsons focuses on the defense, intelligence, and critical infrastructure markets.
Headquartered in Chantilly, Va., the company operates across industries ranging from cybersecurity and intelligence to space and missile defense, as well as transportation, environmental remediation and urban development.
In the AI realm, Parsons focuses on transforming how government and commercial industries operate. Related services and capabilities range from AI technology surveillance and AI recruiting to model verification and validation.
Parsons Stock: Growth Continues
On May 1, Parsons posted record revenue for the first quarter. Sales grew 31% to $1.54 billion. That marked a fifth straight quarter of increases at 24% or greater.
Parsons also generated 63% earnings growth to 70 cents a share. For the full year, analysts expect earnings to increase 22%, followed by a 15% gain in 2025.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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