Wall Street analyst predicts Palantir stock to crash 76%

Core Viewpoint - A Wall Street analyst warns that Palantir's stock price may drop significantly, citing unsustainable valuation and high expectations ahead of the upcoming earnings report [1][3][5]. Valuation Concerns - RBC Capital analyst Rishi Jaluria has reiterated an 'Underperform' rating on Palantir, setting a price target of $45, indicating a potential downside of approximately 76% from the current price of $188 [1][3]. - The stock is trading at over 20 times enterprise value to estimated 2026 revenue, one of the highest multiples in RBC's SaaS coverage [3][4]. Earnings Expectations - Analysts expect Palantir to report earnings of $0.17 per share, a 70% increase year-over-year, with revenues projected to rise nearly 50% year-over-year to $1.09 billion [8][9]. - The upcoming Q3 earnings report is scheduled for November 3, and expectations are described as "exceptionally high" [5][8]. Market Performance - Palantir shares have increased by 20% over the last three months, outperforming the iShares Expanded Tech-Software Sector ETF, which gained about 4% [5]. - The combination of premium valuation and high investor optimism could lead to increased downside risk if the earnings report does not meet expectations [5]. Contrasting Analyst Opinions - Other Wall Street firms, such as Piper Sandler, maintain a more optimistic outlook, raising their price target for Palantir to $201 and citing strong revenue visibility and AI partnerships [6]. - Palantir is expanding its presence in the AI sector through new collaborations with companies like Lumen Technologies and Snowflake [7].