Palantir Breaks 100-Day Moving Average Amid AI Stock Selloff. Should You Buy the Dip in PLTR?

Core Insights - Palantir shares have fallen below their 100-day moving average, indicating potential continued bearish momentum due to bubble concerns and macroeconomic uncertainty [1] - The stock has lost over 20% from its November highs, yet it remains one of the most expensive stocks in the S&P 500 [2] - Palantir's price-sales (P/S) ratio is nearly 130x, significantly higher than the next most expensive S&P 500 stock at 32x, suggesting a potential crash of over 65% while still maintaining the highest sales multiple [3] Valuation Concerns - The company's market cap is nearly $400 billion, supported by under $4 billion in revenue, indicating a fundamental disconnection that has historically led to negative outcomes [4] - Insiders have reduced their exposure to Palantir stock over the past six months, reflecting concerns about its valuation [4] Growth Metrics - In the latest quarter, Palantir experienced growth in both government and commercial segments, but the growth metrics have significantly declined, leading to a structurally fragile condition for the stock [5] Investor Sentiment - Notable investors, including Stanley Druckenmiller and Michael Burry, have raised valuation concerns regarding Palantir shares [6] - Historical performance shows that Palantir has averaged a loss of over 8% in December over the past four years, which does not favor holding the stock [6] Wall Street Perspective - Despite the concerns, Wall Street analysts believe the recent selloff may have been excessive, with a consensus rating of "Hold" and a mean target price of $192, indicating a potential upside of nearly 20% [8]