Finance
Parsons Stock Eyes Breakout as AI Stocks Palantir and Nvidia Rise
Even artificial intelligence whistleblowers Nvidia (NVDA) And Palantir Technologies (PLTR) did not make the list of new purchases by the best investment funds every month this year. But Parsons (PSN) has. And while Palantir reaches a buy point and Nvidia gets some pressure on Thursday, Parsons stock appears to be launching a breakout on its own.
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Parsons doesn’t miss a moment – unlike Nvidia and Palantir
Palantir shares fell off the list of new purchases by top funds in June. That was the first time this year that the AI, defense and intelligence player went bankrupt. But Palantir returned to the list in July.
Demand for Nvidia stock among these top institutional players has been more sporadic. The AI powerhouse made a triumphant return to this monthly stock screen in June, with savvy investors scooping up more than $3.32 billion worth of Nvidia stock. But then Nvidia disappeared in July and was replaced by Microsoft (MSFT), which raised more than $10 billion.
Meanwhile, Parsons stock has undoubtedly appeared on this screen every month this year. One factor driving this unwavering demand is the company’s impressive growth.
Nvidia drops. Don’t Ignore These 8 ‘Secrets’ About When to Sell Stocks.
AI Boom ensures strong and steady growth
Based in suburban Washington, DC, Parsons delivers key technologies across a range of industries, with an emphasis on national security and global infrastructure. The company is involved in cybersecurity and intelligence, as well as space and missile defense. Parsons’ reach also extends to transportation, environmental remediation, urban development and critical infrastructure protection.
In addition to boosting Palantir, Nvidia, Microsoft and more, the AI boom has also boosted Parsons.
Over the past four quarters, sales gains have ranged from 25% to 35%. Last quarter, revenue rose 31% to $1.54 billion. Earnings growth was 35% to 63% in the same period.
Although growth expectations are lower, they remain in the double digits for both the top and bottom lines this year. For the full year, analysts predict earnings growth of 23%, followed by a 15% increase in 2025.
Parsons Stock aims for breakout
The current AI-driven bull market remains robust as the tech-heavy Nasdaq continues to record new highs. However, on Thursday the Nasdaq fell, as did Nvidia, Microsoft and Palantir.
Microsoft and Nvidia remain within striking distance of their all-time highs. Nvidia is down more than 4%, but remains above its 21-day exponential moving average. This also applies to Microsoft, which fell more than 2% on Thursday.
After rocketing past a 26.57 buy point, Palantir rose nearly 4% on Wednesday to close just outside the buy range. With a drop of more than 3% on Thursday, Palantir has retreated and is now trading near the top of that buy zone.
Meanwhile, Parsons stock has found support at the 50-day moving average as it works toward a new handle. In a sign of increasing technical strength, the 21-day line for Parsons just crossed back above the longer-term 50-day benchmark.
The buy point for Parsons is 83.17.
The relative strength line dropped when Parsons formed the new cup-with-handle base. Watch for the RS line to move higher as the potential breakout approaches.
The stock’s B accumulation/distribution rating indicates that there has been more buying than selling over the past 13 weeks. But a weak volume ratio of 0.6 up/down remains below the 1.0 mark to indicate demand. See if that and the relative line of strength start to change as Parsons focuses on another breakout.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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