Analysts Warn of Palantir Stock Overvaluation and Potential 50% Decline

Experts highlight speculative pricing and recession risks as key factors behind cautious investment outlook for Palantir Technologies.

Palantir's stock has surged nearly 390% over the past year, but analysts argue its valuation is heavily inflated with speculative growth expectations.
Morgan Stanley has rated the stock 'underweight' with a price target of $60, predicting a 25% decline in the next 12-18 months due to limited visibility on material estimate revisions.
Concerns focus on Palantir's forward price-to-earnings ratio of 160 and EV-to-EBITDA ratio exceeding 300, which indicate significant overvaluation compared to its intrinsic value.
While Palantir benefits from recession-resilient government contracts and cost-saving enterprise solutions, a potential U.S. recession could lead to a sharp valuation reset of 50% or more.
Analysts recommend waiting for a substantial price correction before investing, citing historical examples of overvalued tech stocks experiencing major declines during economic downturns.