Palantir Technologies (NYSE: PLTR) stock jumped over 5% on Wednesday, but HSBC analysts recommend investors to consider booking some profits.
HSBC Global Research analysts downgraded their rating on Palantir (PLTR) stock from Buy to Hold while maintaining a $22 per share price target, underscoring that the stock’s current valuation is at its peak.
The research note highlighted Palantir’s 2024 guidance, emphasizing the company’s commitment to operational efficiency and top-line growth, which played a pivotal role in its impressive financial performance in 2023.
They wrote,
“We think Palantir is well positioned to benefit from the strong demand for its artificial intelligence products, especially in the faster-growing Commercial segment, while growth in the Government segment will likely reaccelerate with the potential execution of government contracts in 2024e and higher defense spending.”
The analysts highlighted the significant momentum observed in PLTR’s commercial operations, particularly within the United States, where the demand for the company’s AI platform remains unabated. Describing Palantir’s growth outlook as “impressive,” the analysts believe the stock has become “rich” with a PEG ratio of 3.16x for 2024e.
Analysts said,
“We downgrade to Hold but not Reduce as we believe the stock remains highly leveraged to the rising adoption of AI.”
Palantir (NYSE: PLTR) Stock Price Action
PLTR stock soared 4.91% to close at $25.19 on Wednesday. The traders had exchanged hands with 96,645,216 (96.64 million) shares compared to the average daily trading volume of 69.69 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
