For a while, Palantir (NYSE:PLTR) looked like it was making a comeback. A post-earnings rally was in the works after the firm managed to do what some never believed it could: turn a profit. But those hopes may be all but dashed as analysts turn on Palantir.
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William Blair analyst Louie DiPalma turned the tables on Palantir’s rally. DiPalma noted that there are potentially six big problems coming up for Palantir – six major government contracts that are up for review over the next year and a quarter. That’s bad enough, but three of the contracts in question are among the four biggest contracts that Palantir has. Worse, there are signs that Palantir has big new competition from the open-source market, which will likely be a lot less stringent about contracts.
That’s a potentially huge loss for Palantir. However, Palantir already took one actual loss in Europe. The German Federal Constitutional Court nullified Palantir’s AI algorithm for use in policing. Ultimately, the algorithm found itself declared as unconstitutional. Some noted that the algorithm could ultimately be used as a “predictive policing” tool. It could ultimately call out key mistakes and discriminatory actions taken by legal officials.
Overall, analyst consensus calls PLTR stock a Hold and comes with 1.29% downside risk thanks to its average price target of $8.41 per share.
