Palantir's (PLTR) AI Momentum Impresses, but Valuation Still 'Too Hot'

Palantir Technologies Inc. (NASDAQ:PLTR) is one of the AI Stocks Analysts are Tracking Closely. On November 13, Freedom Capital raised the firm’s price target on the stock to $170 from $125 and kept a “Sell” rating on the shares.

The firm is cautiously bearish on the stock, acknowledging Palantir’s robust performance while highlighting how valuation risks may outweigh potential upside.

According to the firm, Palantir delivered Q3 upside versus guidance due to a sharp rise in US Commercial growth, in turn driven by record bookings and AIP adoption.

Despite this rise, European operations have remained flat.

Moreover, management has guided above investor expectations for Q4 but investors are concerned about several factors such as possible defense budget pressure, headwinds from AI hiring, and a likely growth slowdown in US commercial after a record year.

“Reflecting sustained near-term momentum, our target price increases from $125 to $170, but elevated valuation implies embedded hypergrowth that is unlikely to persist indefinitely, so the SELL rating is maintained.”

Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems.

While we acknowledge the potential of PLTR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 AI Stocks in the Spotlight This Week and 10 AI Stocks Investors Are Watching. 

Disclosure: None.