The Largest Single-Day Drop in a Month
Morgan Stanley "Reducing Weight"
Last year, Palantir Technologies, an artificial intelligence (AI) software company that soared more than fourfold on the New York Stock Exchange, was deemed excessively overvalued by Wall Street analysts. As a result, on the 6th (local time), Palantir's stock experienced its largest single-day drop in a month.
On that day, Palantir's stock closed at $75.92, plunging 4.97% on the Nasdaq Stock Exchange. This was the largest daily decline since December 9 last year (-5.08%). Last year, Palantir attracted attention as an AI defense stock, with its stock price skyrocketing 340%, surpassing the market capitalization of traditional defense company Lockheed Martin.
The sharp decline in the stock price was influenced by Morgan Stanley assigning a weight reduction rating to Palantir while setting a target price of $60. This implies a roughly 21% decrease from the current stock price level. Sanjit Singh, a Morgan Stanley analyst, explained, “While Palantir’s strong execution and momentum are acknowledged, the current high valuation already fully reflects the upside potential.”
Palantir is a company that supports strategic planning for major U.S. government agencies such as the Department of Defense, Central Intelligence Agency (CIA), and Federal Bureau of Investigation (FBI) through its AI intelligence analysis tool, ‘Palantir Gotham.’ The company’s value rapidly increased due to special demand from the Gaza Strip and the Ukraine war, and last year it achieved inclusion in the S&P 500 index (September), which focuses on large U.S. stocks, and the Nasdaq 100 index (December), which focuses on major technology stocks.
However, on Wall Street, opinions that Palantir’s stock is overvalued continue to mount. According to financial information provider FactSet, no investment bank (IB) has set a target price higher than Palantir’s closing price on the 3rd. Wedbush Securities, which set the highest target price for Palantir, set it at $75, while RBC Capital Markets, which set the lowest target price, set it at $11. Palantir’s price-to-earnings ratio (PER) is 353 times, which is high even compared to companies like Nvidia (58 times) and Tesla (101 times), whose stock prices have risen sharply.
However, analyst Singh forecasted that the fact that Peter Thiel, co-founder of Palantir and founder of the PayPal Mafia, is expected to have close ties with the second Trump administration could be positive for Palantir’s future profitability expansion.
Palantir is one of the representative companies loved by foreign investors known as ‘Seohak Gaemi.’ According to the Korea Securities Depository, domestic investors purchased $460 million (approximately 670 billion KRW) worth of Palantir shares over the past month (December 4, 2024 ? January 3, 2025), ranking second in net buying volume after Tesla.
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