Palantir Stock Downgraded Amid Valuation Concerns

Despite strong gains and AI adoption, concerns over valuation and economic outlook prompt downgrade to sell.

Palantir Technologies stock has experienced a significant rise, gaining 34% year to date and 186% over the last 12 months, driven by improved margins and adoption of AI services.
Monness, Crespi, Hardt & Co. downgraded Palantir's stock from neutral to sell, setting a price target of $20, which implies a 13% downside from its current price.
The downgrade was influenced by concerns over the company's valuation, lumpy sales to government customers, and the anticipation of darker economic days ahead.
Despite the downgrade, Palantir is considered well-positioned to benefit from long-term AI trends, with sales growth reaccelerating due to its Artificial Intelligence Platform suite.
Investors are advised to consider their risk tolerance and potentially seek more conservatively valued candidates in the AI space given Palantir's high growth-dependent valuation.