Palantir’s 150% Driven Rally Has Gone Much Too Far Some Analysts Argue
Palantir trades at 100 times earnings, a huge premium to peers.
After a 150% rally that’s added about $60 billion in market value, Wall Street thinks Palantir Technologies Inc. has gotten way ahead of itself.
Tweet of Palentir’s stock fluctuation
Shares of @PalantirTech which makes data analysis tools for companies and governments, have soared this year, helped by its inclusion in the S&P 500#palantir #data #Analytics pic.twitter.com/c1r6YFyqn6
— The_Journalbiz (@the_journalbiz) October 24, 2024
Bloomberg chart
Shares in the company, which makes data analysis tools for companies and governments, have soared this year, helped by its inclusion in the S&P 500 Index in September and its success in leveraging artificial intelligence.
The shares trade at more than 100 times future earnings, a hefty premium over other AI names, some of which are also considered too pricey by investors. Nvidia Corp. has a multiple of about 37 times forward earnings, while software firm Oracle Corp., which has also been riding AI-related tailwinds, trades at just 26 times.
Palantir shares “need to consolidate stellar gains over the last couple of years and grow into its rich valuation,” Raymond James analysts led by Brian Gesuale wrote in a recent note, downgrading the stock.
The rally means Palantir has “no room for error” when it reports earnings next month, he added.
Palantir shares rose as much as 2.2% in early trading Thursday.
