Benzinga - by Shanthi Rexaline, Benzinga Editor.
Palantir Technologies, Inc.'s (NYSE:PLTR) shares shed over 8% Thursday after Morgan Stanley analyst Keith Weiss downgraded the stock to Underweight, which equates to a sell recommendation.
What Happened: Palantir investors did not take kindly to the downgraded opinion from Morgan Stanley and pointed to the firm making a bigger bet in the data analytics provider in the second quarter.
Morgan Stanley had 17.94 million Palantir shares, valued at $275 million, at the end of the second quarter, according to the firm's recent 13F filing, Fintel reported. This represented a 56.5% increase from the previous quarter.
“This report felt more like an end-of-August hit piece to grab cheaper shares than a true bear thesis because a larger bear case would be that AIP rev growth is NOT coming,” one user on X said.
“Make no mistake, Morgan Stanley wants $PLTR at a lower price so they can buy too… don't get angry, play the game,” another commented.
Why It's Important: Morgan Stanley's premise for its bearish thesis is based on its view that AI platform revenue contribution will likely delayed, anticipated top-line deceleration, and a difficult setup in the second half versus a lofty guidance.
The “AI euphoria” is already reflected in valuation but monetization likely take time to materialize, the analyst said.
Palantir investors pointed out that most of the other AI-levered stocks have also been trading at heady valuations. They see the pullback in Palantir as the right opportunity to accumulate more shares.
“As an investor you have to ask yourself what price you are willing to pay for that future growth (especially if you believe that growth will be explosive),” an investor said.
In premarket trading, Palantir stock slipped 0.47% to $14.91, according to Benzinga Pro data.
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