Will Palantir slump accelerate to retest $50?

Core Viewpoint - Palantir's share price has experienced a significant decline in early 2025 after a remarkable rise in 2024, primarily driven by the AI sector's growth, raising concerns about a potential slump [1][3]. Group 1: Stock Performance - Palantir's stock reached a record high of nearly $85 in 2024 but has faced a rough start to 2025, with a recent price of $65.17, reflecting a 4.4% loss over the past five days [1][2]. - Analysts project that Palantir's stock could drop below $50 within the next 12 months, with a consensus estimate of $46.57, indicating a decline of over 30% from its current valuation [9]. Group 2: Analyst Sentiment - Wall Street analysts have a mixed outlook on Palantir, with some optimistic about the AI sector's demand while others express concerns over valuation and potential corrections [4]. - Jefferies analyst Brent Thill set a price target of $28, citing concerns over valuation and volatility, while Morgan Stanley downgraded the stock to "Underweight" with a $60 price target [5][6]. - Deutsche Bank raised its price target from $26 to $35 but maintained a "Sell" rating, indicating caution despite recognizing Palantir's potential in AI software [8]. Group 3: Technical Analysis - Some analysts view the current price correction as a healthy pullback, with key Fibonacci levels identified at $64.68 and $49.60 as potential support areas [11][12]. - The stock remains above its 200-day moving average, which is near $36.00, supporting a long-term bullish case [12]. Group 4: Future Outlook - Palantir is set to release its Q4 2024 earnings on February 3, 2025, which is seen as a critical moment for the stock's future trajectory [15]. - To avoid further declines, Palantir must demonstrate growth, profitability, and operational efficiency to reassure investors of its long-term value [15].