- Summary:
- Palantir stock faces a potential correction after a Morgan Stanley downgrade to 'Underweight' with a $60 price target.
Palantir Technologies Inc. (NYSE: PLTR) is one of 2024’s most celebrated stocks, boasting an impressive 340% rally that crowned it the top performer in the S&P 500. Nonetheless, recent events indicate that the stock may be nearing a correction as analysts ponder if its valuation has outpaced its fundamentals.
Morgan Stanley Downgrade Sparks Concerns
Morgan Stanley has recently lowered Palantir’s rating from ‘Equalweight’ to ‘Underweight,’ pointing to overvaluation worries and establishing a price target of $60—approximately 25% beneath its present value. Experts think the swift increase in the stock is fueled more by excitement than by revenue increases, raising questions about its capacity to maintain such elevated valuations. The downgrade caused a 5% decline in Palantir’s stock price as investors started to reevaluate its elevated standing.
Chart Analysis: Key Levels to Watch
Palantir’s share price has shown resilience near $75.22 after the recent dip, but technical analysis reveals important levels that could signal a larger correction. Support zones to watch include $70.20, a key psychological level, followed by $65.79 and $58.63. A break below these levels could accelerate selling pressure, potentially taking the stock toward $51.85 or even $45.17 if broader market conditions worsen.
What’s Next for Palantir?
While Palantir continues to lead in AI and big data, its swiftly rising valuation has rendered it vulnerable to profit-taking and unfavourable forecasts. Investors need to keep an eye on the company’s future earnings and new contract announcements to determine if its fundamentals can align with its price. At this moment, carefulness is advisable as the stock moves through a pivotal point.