Jim Cramer Spots Retail Hype Behind 2 Soaring Tech Stocks — Are Stocktwits Users Feeling It Too?

The U.S. stock market has been on a roll, shrugging off macro and geopolitical headwinds. The surge in some popular equities has revealed a touch of retail frenzy, according to CNBC host and Mad Money host Jim Cramer.,

Cramer said on Monday that tech stocks Palantir Technologies, Inc. (PLTR) and AppLovin, Inc. (APP) were among four companies he dubbed as “PARC” names. 

These are “emblematic of how stocks have devolved into a two-track market,” he said, adding that “There’s the S&P 500, and then there’s this handful of stocks that retail investors have anointed and relentlessly taken up, without any real bounds.”

Palantir’s stock has gained over 100% year-to-date compared to a 13% advance by AppLovin’s stock.

Cramer also included fintech firm Robinhood Markets, Inc. (HOOD) and cryptocurrency exchange Coinbase, Inc. (COIN) in his list.

Despite the underwhelming performances by these stocks on Monday, even as the S&P 500 hit a new high, Cramer expects them to bounce back. He views these stocks as trendy, having caught the imagination of retail investors. 

Analysts’ attention and solid earnings are added pluses for these names, he said. Retail traders, however, are not always cued in to these positives, but they are “irrational believers in these companies,” he added.

“Aside from occasional pit stops like today, the PARC stocks just keep running,” Cramer said, referring to Monday’s performance. “And until we see a wave of new IPOs creating a supply glut and a ton of insider selling, I wouldn’t be surprised if they continue to rally.”

On Stocktwits, retail sentiment toward Palantir stock remained ‘bullish’ as of early Tuesday, although the degree of optimism had tempered from the previous day. The message volume, however, has toned down to a ‘normal’ level.

The sentiment toward AppLovin stock also stayed ‘bullish,’ with message volume tapering to a ‘normal’ level. The adtech company has seen volatility this year amid allegations from short sellers of misrepresentation of key operational metrics.

In Tuesday’s early premarket session, Palantir stock fell 1.15% to $150.08, while AppLovin added 0.65% to $368.55.

The Koyfin-compiled average analysts’ price target for Palantir and AppLovin is $104.96 and $463.20, respectively. The 12-month price targets imply a more than 30% downside for Palantir but a 26.50% upside for AppLovin.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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