Morgan Stanley Downgrades Palantir Stock Rating

Morgan Stanley has downgraded Palantir Technologies (PLTR) to an 'underweight' rating, setting a target price of $60 per share, reflecting concerns about the sustainability of its impressive growth trajectory following a staggering 340% gain in 2024. Analysts argue that Palantir's stock is currently overvalued, with many key performance indicators showing signs of stabilization rather than improvement, potentially leaving little room for upside without extraordinary results. Despite strong performance in its U.S. commercial segment, some analysts believe the company's future growth is already priced in, and that it faces increasing competition as enterprise clients enhance their own AI capabilities. The broader consensus target price on Wall Street is around $46, indicating a significant downturn from current levels. Additionally, market observers suggest that Palantir's speculative stock price may be vulnerable to economic downturns, with projections indicating potential declines of 50% or more in a recession. Investors are advised to exercise caution and consider waiting for a more favorable valuation before making investment decisions.