Palantir’s (PLTR) stock had a rough November.
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Shares of the data analytics company plunged 16% over the last four weeks, marking their worst monthly performance since August 2023. The fall comes as investors flee stocks tied to the artificial intelligence (AI) trade due to high valuations and worries about a bubble forming.
It also didn’t help that investor Michael Burry of “The Big Short” fame disclosed a massive short position in PLTR stock, betting that the share price will decline. Some analysts have said that Palantir’s shares were due for a comedown given that they trade at nosebleed levels. Even after November’s decline, the stock is trading at nearly 700 times future earnings estimates.
Shifting Sentiment Toward PLTR Stock
Palantir was riding high entering November. The Denver-based company beat Wall Street’s third-quarter earnings and revenue forecasts, and posted its second consecutive quarter of sales that topped $1 billion. However, news of Michael Burry’s short position and worries about the high valuation ultimately sank the shares.
In a note to clients, Jefferies Financial Group (JEF) called Palantir’s valuation “extreme” and argued that investors would find better risk-reward in AI names such as Microsoft (MSFT). Analysts at Deutsche Bank (DB) were equally critical of Palantir’s valuation, saying in a note to clients that it’s “very difficult to wrap our heads around.”
Is PLTR Stock a Buy?
The stock of Palantir Technologies has a consensus Hold rating among 16 Wall Street analysts. That rating is based on three Buy, 11 Hold, and two Sell recommendations issued in the last three months. The average PLTR price target of $187.87 implies 11.36% upside from current levels.
