Palantir Technologies Inc. (PLTR) experienced a significant plummet of 5.03% during Tuesday's intraday trading session. The decline came amidst mounting concerns over the company's lofty valuation and potential challenges to sustaining its rapid growth trajectory.
One of the primary factors contributing to the stock's decline was a cautionary note from Wall Street analyst Rishi Jaluria of RBC Capital. Jaluria set a price target of $11 for Palantir, implying a staggering 86% downside from its current levels. The analyst raised concerns about the company's valuation, which currently trades at a price-to-sales ratio of nearly 73, significantly higher than historical norms for even leading-edge technology companies.
Additionally, while Palantir's unique AI-driven Gotham and Foundry platforms have propelled its growth, there are concerns about the long-term growth runway for the Gotham platform, which primarily serves government clients. The company's management has stated that it will not allow certain non-allied nations access to its intuitive platform, potentially limiting its expansion opportunities in certain markets.