Since September, the once dubbed ‘Messi of AI’ Palantir (NASDAQ: PLTR) has been on a remarkable run.
Driven by a string of upward catalysts, PLTR stock surged 166.6% from its early September price near $30 to its press time price of $80.08. Once the chart is extended to the entire 2024, Palantir shares are 381.30% in the green.
Still, despite the technology giant running ‘through all the stop signs,’ there has been no shortage of cautionary, even pessimistic assessments, with the latest coming from William Blair just as the company’s stock recorded its new record high.
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Why William Blair is bearish on Palantir stock
Specifically, William Blair analyst Louie DiPalma reiterated an ‘underperform’ – ‘sell’ – rating for PLTR shares on December 9, primarily reflecting on the likelihood the company will miss its 2025 $4.5 billion revenue target by more than $700 million.
DiPalma simultaneously opined that, despite the positive media coverage, the new partnership with Booz Allen (NYSE: BAH) is unlikely to change much as the firms have already been cooperating for some time.
Furthermore, the analyst cited the stock market performance of one of Palantir’s peers – Snowflake (NYSE: SNOW) – as a major reason behind the bearish outlook for PLTR shares.
Indeed, the expert from William Blair opined that there is little difference between Snowflake and Palantir’s fundamentals, despite the latter having a valuation more than $100 billion higher than the former, thus implying PLTR shares’ fair value is closer to $40.
DiPalma did not mention the announced partnership between Alex Karp’s technology giant and another Lord of the Rings-themed company, Anduril.
How William Blair echoes other bearish PLTR stock analysis
The William Blair reiteration of the ‘underperform’ rating echoes, in many ways, previous cautionary statements made by various Wall Street analysts.
In fact, many of the price target revisions were positive about Palantir overall but warned that the company’s stock is, in essence, turning into a bubble as the fundamentals do not justify the continued rally.
Such a situation does much to explain why a company whose shares have surged more than 30% in 30 days is displayed as a ‘hold’ on stock rating aggregate platforms with more recorded ‘sell’ recommendations than ‘buys.’
Still, so far, the warnings have seemingly fallen on deaf ears.
Driven by its inclusion in the benchmark S&P 500 index and relisting to the NASDAQ for future inclusion in the Nasdaq 100 index, PLTR stock has been riding ever higher, and, at press time on December 9, it remains to be seen if the bearish analysts or the bullish investors will capitulate first.
