Jefferies downgraded Palantir Technologies Inc. (NASDAQ:PLTR) to “Underperform” due to stiff competition and concerns over growth drivers.
Palantir reported a 39% increase in revenue, reaching $884 million, but faced a 7% decline in premarket trading.
The company’s stock price dropped 9.3% in after-hours trading, reflecting market concerns over its high valuation and future earnings growth.
On May 6, 2025, Jefferies downgraded Palantir Technologies Inc. (NASDAQ:PLTR) to “Underperform,” while maintaining a “hold” action. At this time, the stock price was $123.77. Palantir, known for its data analytics software, serves both commercial and government sectors. Despite its innovative solutions, the company faces stiff competition from tech giants like IBM and Oracle.
Palantir’s recent financial performance has been a mixed bag. The company reported a 39% increase in revenue, reaching $884 million, surpassing forecasts. However, the stock experienced a 7% decline in premarket trading. This decline reflects investor concerns over the lack of new growth drivers and a tepid international performance, despite strong domestic results.
In the U.S., Palantir’s commercial sales surged by 71%, and government contracts increased by 45%. CEO Alex Karp described this growth as “unparalleled.” However, the stock’s high valuation, trading at 238 times its estimated earnings, has raised concerns. This is significantly higher than industry leaders like Nvidia and Broadcom, which trade at 26 and 31 times forward projected earnings, respectively.
Despite the positive financial results, Palantir’s stock price dropped 9.3% in after-hours trading. The market’s high expectations for earnings growth were already factored into the stock price, leading to the decline. The stock was anticipated to open at $114.67, down $9.10 from its previous close.
Palantir’s market capitalization stands at approximately $292.06 billion, with a trading volume of 124,675,137 shares. The stock has fluctuated between a low of $121.36 and a high of $125.255 today. Over the past year, it has reached a high of $125.41 and a low of $20.5. Despite the recent downgrade, Palantir remains a significant player in the tech industry.
