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Palantir Technologies' (NYSE:PLTR) stock fell about 2% premarket on Thursday after Monness downgraded the shares to Sell from Neutral citing the company's "rich valuation."
The firm has set a $20 price target on the stock.
The analysts said that on the back of an unprecedented generative AI hype cycle, Palantir surged in 2023 and the stock's upward trajectory has continued in 2024, leaving the company with what they view as an egregiously rich valuation.
In Monness' view, Palantir — which offers software platforms for the intelligence community — is well positioned to benefit from the long-term AI trend and can capitalize on volatile geopolitics.
However, the analysts think that revenue from government-related contracts has proven lumpy, execution spotty, and valuation excessive, and believe the darkest days of this economic downturn are ahead.
Palantir Technologies (PLTR) has a Hold rating at Seeking Alpha's Quant Rating system, which consistently beats the market. Meanwhile, the Seeking Alpha authors' average rating is also Hold and so is the average Wall Street analysts' rating, Hold.
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