Morgan Stanley anticipates a rocky road ahead for shares of Palantir after a record 2024 run fueled by artificial intelligence. Analyst Sanjit Singh assumed research coverage of the software company with an underweight rating, saying that despite its early AI strides, the risk-reward ratio looks skewed to the downside. The stock was previously not rated at Morgan Stanley. “While acknowledging strong execution and momentum, we see success more than priced in at the current multiple premium,” Singh wrote. Along with the underweight rating, Singh placed a $60 price target on Denver-based Palantir, omplying roughly 25% downside from Friday’s close. Shares briefly fell as much as 3.8% early Monday before rebounding. Palantir is coming off a blockbuster year that saw shares surge 340% as it benefited from AI tailwinds that drove it to be included in both the S & P 500 and Nasdaq-100 stock indexes. Looking ahead, Singh believes that “the skills/capabilities of the enterprise with respect to building AI applications should likely improve, which may make it difficult for Palantir to sustain its current level of momentum, creating downside risk given the premium valuation of the shares.” PLTR 1Y mountain Palantir Technologies shares over the past year.
