Analyst Pumps the Brakes on Gen-AI Stock

Monness Crespi Hardt did not mince words in its downgrade of the AI stock

Palantir Technologies Inc (NYSE:PLTR) is down 3.7% to trade at $23.65 today, after Monness Crespi Hardt downgraded the software stock to “sell” from “neutral.” The analyst in coverage did not mince words about the Peter Thiel-backed tech company, calling out its ‘egregiously rich valuation’ and despite a “meteoric rise on the Gen AI rocket, now it’s time to return to reality.” The brokerage did wax bullish on Palantir’s long-term artificial intelligence (AI) uptrend, though.

The shares are now testing their 40-day moving average, a trendline that flipped to support after a massive 30.8% post-earnings bull gap on Feb. 6. Despite the breather today, PLTR is 40% higher in 2024 and scored a more than two-year high of $27.50 on March 7.  

It’s no surprise then, that calls rule the roost. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security’s 50-day call/put volume ratio of 2.78 ranks higher than 74% of readings from the past year.

Now may be an ideal time to weigh in on the stock’s next move with options. This is per PLTR’s Schaeffer’s Volatility Index (SVI) of 45%, which stands in the 1st percentile of readings from the last 12 months. In other words, the market is pricing in low volatility expectations for the equity right now.

 

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