Shares of data analytics powerhouse Palantir Technologies (NYSE:PLTR) are down at the time of writing. This downward adjustment comes in the wake of an evaluation by investment firm Raymond James, which has downgraded the software giant. Despite their continued enthusiasm for Palantir’s AI acumen, they’ve opted to downgrade their rating from Strong Buy to Outperform. The reasoning behind this? Palantir’s value skyrocketed by a whopping $12 billion and saw a surge of over 60% since its initial Q1 report in May and its simultaneous AI platform launch, reflecting a significant part of their short-term optimism.
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However, this doesn’t mean the company has been written off. Quite the contrary, as the same analyst, Brian Gesuale, who downgraded the stock, paradoxically raised his share price target from $15 to $18. As he looked into the future, he made a revenue forecast for Palantir’s AI platform up to 2025. He highlighted that Palantir is now experiencing its third distinct cycle in its public company journey, with a government software prime phase, a 2020-2023 trough, and now, a narrative dominated by artificial intelligence opportunities. Gesuale posits that this is the year Palantir’s fundamentals bottom out, priming the company to capitalize on the flourishing AI landscape
Overall, analysts have a Hold consensus rating on PLTR stock based on two Buys, six Holds, and four Sells assigned in the past three months, as indicated by the graphic above. However, the average price target of $11.13 per share implies 31.72% downside potential.
