Palantir stock falls on downgrade, slashed price target

Palantir Technologies (PLTR) shares are trading lower Thursday after Brian White, an analyst from Monness, Crespi, Hardt & Co., downgraded the stock to Sell from Neutral. Additionally, White lowered his price target to $20, citing an "excessive" valuation fueled by the AI boom and that he believes "the darkest days of this economic downturn are ahead of us."

Yahoo Finance's Josh Lipton and Akiko Fujita breaks down the details.

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Editor's note: This article was written by Angel Smith

Video transcript

AKIKO FUJITA: Well, time now for our call of the day. Palantir slipping as one analyst called the software company's valuation excessive and gave the company a sell rating. Brian White from Monnes, Crespi, Hardt downgrading the stock from neutral, setting a 12-month price target of $20, saying its meteoric rise on the AI boom is due for a reality check.

Josh, we should point out this isn't so much about being negative on Palantir. It is about the valuation that it is just run up so much. And when you actually think about where things stand right now in the note, saying based on our estimates, Palantir garners the richest valuation in enterprise software group while also claiming the top spot across the entire universe of coverage. So, yes, the outlook is still positive. But at these price levels, not necessarily a good entry point.

JOSH LIPTON: Yeah. And I think, you know, as the analyst says, after a meteoric rise on the GenAI rocket, Akiko, back to reality. That's sort of what he's writing. And to your point, listen, the stock is up about 30% this year. It's up about 190% over the past 12 months. So you can understand some financial analysts some getting a little nervous about valuation. Long term, to your point, he's telling clients he still thinks Palantir is well positioned to benefit from the AI train to capitalize, he thinks, on continued sort of, you know, volatile geopolitics. But near term, he's got questions, and he moves to a sell.

AKIKO FUJITA: Yeah, the AI trade is still very much intact there.