Shares of tech company Palantir Technologies (PLTR) and TASER manufacturer Axon Enterprise (AXON) are seeing mixed results on Monday after being announced as new additions to the Nasdaq 100 index (NDX), effective December 23.
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Palantir fell as investors appeared to lock in profits following significant gains this year, while Axon rose slightly as its rally continued. Both stocks have surged over 100% in 2024, which made them prime candidates for the index’s annual reconstitution. Interestingly, though, analysts are much more bullish on Axon stock.
Valuation Concerns Surround Palantir
Palantir’s decline is likely due to concerns about its valuation. In fact, only two of 16 analysts covering the stock in the past three months rate it as a Buy, and five-star Mizuho analyst Gregg Moskowitz is not one of them. Moskowitz raised Palantir’s price target to $44 from $37 but maintained an Underperform rating as part of the firm’s 2025 software sector outlook.
The updated price target reflects the recent rise in comparable multiples. And although the firm believes the risk/reward profile for the overall software sector is more balanced heading into 2025, it clearly is not very bullish on Palantir specifically.
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 $41.92 per share implies 43.1% downside risk.
Analysts See More Upside for Axon
When it comes to Axon, analysts are less concerned about its valuation and all analysts covering the stock during the past three months rate it a Buy. Indeed, five-star Baird analyst William Power increased Axon’s (AXON) price target to $800 from $600 while maintaining an Outperform rating. After meeting with management, the firm pointed to Axon’s early success with its newly launched AI Era Plan and believes its focus on AI is a good reason to remain optimistic.
Axon’s AI Era Plan is a strategy to bring advanced artificial intelligence into its products. The plan focuses on using AI to make law enforcement workflows faster and more efficient by automating tasks like evidence management and analyzing body camera footage more effectively.
Is AXON Stock a Buy or Sell?
Overall, analysts have a Strong Buy consensus rating on AXON stock based on 11 Buys assigned in the past three months, as indicated by the graphic below. However, the average AXON price target of $613 per share implies 5% downside risk.
