ChatGPT-5 sets odds of Palantir stock crashing below $50

Core Insights - Palantir's share price is experiencing significant upward momentum, closing at $186.96, up over 2%, and nearly 150% year-to-date, but concerns about its high valuation persist [1][2] - The recent rally is attributed to strong Q2 2025 earnings, with revenue exceeding $1 billion for the first time and adjusted EPS of $0.16, surpassing expectations [2] - There is a 30% to 35% chance that Palantir's stock could drop below $50 within the next 18 to 24 months, primarily due to its high earnings multiple and potential growth slowdown [3][4] Financial Performance - Palantir reported Q2 2025 earnings with revenue growth of 48% year-over-year, reaching $1 billion, which exceeded the consensus estimate of $940 million [2] - Adjusted EPS was reported at $0.16, compared to the expected $0.14, indicating stronger-than-anticipated profitability [2] Valuation Concerns - The stock is considered vulnerable to significant valuation drops if growth lags, with historical data showing high-growth stocks can experience drawdowns of up to 80% [4] - High interest rates and changing sentiment towards technology stocks could negatively impact Palantir's valuation [4] Technical Analysis - A potential four-phase decline to sub-$50 is outlined, starting with a breakdown from recent highs on an earnings miss or weak guidance, falling below $160 support [5][9] - Key price levels to watch include resistance at $125-$132, breakdown levels at $119-$118, and mid-term weakness below $100 [8] - A clear break below $160 is identified as the first warning sign for a potential decline [9] Market Sentiment - Key catalysts for a sharper decline include sustained high interest rates, revenue growth slipping below 20% year-over-year, and rising competition from larger tech firms [9] - The sentiment towards "story stocks" could shift, leading to a de-risking of highly valued stocks if growth expectations are not met [4][9]