AI software company Palantir Technologies (PLTR) has just entered into bear market territory after its shares fell more than 20% from their recent all-time high of $84.80. This comes after Cathie Wood’s Ark Invest recently trimmed its position in the stock and after Deutsche Bank, led by five-star analyst Brad Zelnick, reaffirmed its Sell rating earlier today. Interestingly, though, the bank raised its price target from $26 to $35. Nevertheless, the revised target still equates to almost 50% downside from current levels.
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The Sell rating is due to Deutsche Bank’s 2025 software sector outlook. While the bank is optimistic overall, thanks to better fundamentals and AI-driven demand, concerns about capex and slow generative AI adoption remain. It is worth noting that, so far, Zelnick has enjoyed a 68% success rate on his stock ratings, with an average return of 12.2% per rating.
Separately, Morgan Stanley also weighed in earlier this week by initiating coverage with a Sell rating and a $60 price target. The investment firm believes that Palantir’s stock, which has jumped over 350% in the past year, is overvalued due to AI-related hype. And while the bank does see some positive trends, it still doesn’t expect major earnings upgrades to justify the price. Morgan Stanley also warned that any excitement about ties to the incoming Trump administration may not boost the stock for long.
Is Palantir a Buy, Sell, or Hold?
Overall, analysts have a Hold consensus rating on PLTR stock based on two Buys, eight Holds, and six Sells assigned in the past three months, as indicated by the graphic below. In addition, the average PLTR price target of $44.85 per share implies 34.1% downside risk.
