Palantir (NASDAQ:PLTR) just hit another speed bump. Cathie Wood’s ARK Invest sold nearly 200,000 shares worth $15 million this week, sending the stock sliding 6% today. This marks a continuation of ARK’s broader sell-off, with Palantir now making up just 4.2% of its Fintech Innovation ETF. The move isn’t surprisinganalysts have been screaming overvaluation. Morgan Stanley’s Sanjit Singh slapped an Underweight rating on the stock, with a $60 price target that’s miles below its current price of $71. And he’s not alone. Hataf Capital recently flagged Palantir’s sky-high forward P/E ratio of 200x as unsustainable.
Even Palantir’s own Chief Revenue Officer seems to be cashing in on the hype. Ryan D. Taylor exercised options at $4.72 a share but turned around and sold most of them for $73+ each, pocketing $36 million in the process. While some investors might shrug this off as routine, it adds fuel to the narrative that insiders see a ceiling to Palantir’s meteoric run. Meanwhile, the stock’s reliance on U.S. government contractslike a $400.7 million deal with the Armyraises questions about revenue stability. Still, Wedbush remains bullish, banking on Palantir’s edge in AI and partnerships like its Warp Speed initiative in manufacturing.
So, what’s next? Palantir’s stock is now 16% off its 52-week high, leaving investors to wonder if the slide will continue or if the AI darling can regain its mojo. Bulls point to its Nasdaq 100 inclusion and AI-driven growth as potential catalysts, while bears are fixated on those nosebleed valuations and Morgan Stanley’s grim forecast. Either way, Palantir’s 2025 story is shaping up to be a high-stakes drama investors won’t want to miss.
This article first appeared on GuruFocus.