Why Is Wall Street So Bearish on Palantir? There's 1 Key Reason.

Core Viewpoint - Palantir Technologies has experienced significant stock growth driven by the adoption of artificial intelligence and its data mining software, with a 161% increase over the past year and a 2,160% increase over three years [1] Group 1: Stock Performance and Analyst Sentiment - Despite strong performance, Wall Street remains skeptical, with only 17% of analysts rating the stock as a buy or strong buy [2] - The bearish sentiment is attributed to the stock's high valuation, which is seen as frothy given its performance [2] Group 2: Financial Performance - Palantir's third-quarter results showed a 63% year-over-year revenue growth to $1.18 billion, with earnings per share soaring by 200% [3] - U.S. commercial revenue surged by 121%, now accounting for 34% of total sales [3] Group 3: Valuation Concerns - The stock is currently valued at 405 times earnings and 113 times sales, with a PEG ratio of 3.4, indicating it is extremely overvalued in the short term [4] - There is a potential for a significant correction in the stock price, estimated at 50% or more [4] Group 4: Long-Term Growth Potential - Wall Street projects a 41% annual revenue growth for Palantir over the next five years, potentially reaching $24 billion in revenue and a market cap of $2.4 trillion [5] - This underscores the importance of a long-term investment perspective despite current bearish views [5]