Reasons Behind the Strong Sell Recommendations for Palantir Stock by These Three Wall Street Analysts

Palantir (NASDAQ:PLTR) Stock Hits Record High Amid Strengthening Fundamentals

Palantir (NASDAQ:PLTR) stock is extending its bullish run, hitting a new record high amid strengthening fundamentals such as its government business.

PLTR shares closed up 2.9% on Monday at a new all-time high of $141, surpassing Friday’s record. The rally came as markets shrugged off geopolitical tensions in the Middle East that had rattled equities on June 13.

Year-to-date, Palantir shares have soared nearly 90%, fueled by expanding contracts under the Donald Trump administration.

Palantir’s momentum has accelerated partly due to recent deployments of its Foundry platform across several federal agencies, including the Departments of Homeland Security and Health and Human Services.

Despite the surge, some Wall Street analysts remain skeptical, believing the stock’s valuation has risen too high.

For instance, at Mizuho, analyst Gregg Moskowitz raised his price target for PLTR from $94 to $116 on June 11 but kept an ‘Underperform’ rating. He pointed to Palantir’s strong execution and upward estimate revisions. However, he warned that the stock trades at enterprise value-to-sales multiples that are significantly higher than the broader software sector, about 80x for 2025 and 65x for 2026. In his view, these premiums can only be justified if Palantir continues delivering outsized growth from its large-scale government contracts.

RBC Capital’s Rishi Jaluria also remains cautious. While noting Palantir’s robust margins (80.25%) and impressive revenue growth of 28.79%, he maintained a $40 price target and an ‘Underperform’ rating. In a June 5 note, Jaluria raised concerns about the company’s commercial segment and high valuation, particularly its 505x price-to-earnings ratio, which he believes already prices in much of the expected future growth.

Meanwhile, Deutsche Bank analyst Brad Zelnick lifted his price target from $50 to $80, also sticking with a ‘Sell’ rating. He credited Palantir’s AI momentum and financial strength but argued the stock’s valuation, roughly 57x projected 2026 revenue and around 140x free cash flow, is excessive. According to Zelnick, the risk-reward tradeoff looks increasingly unfavorable even with upgraded projections.

Adding to these concerns is that in recent weeks, Palantir insiders have been increasingly offloading the stock, a move likely to spook investors about the firm’s long-term outlook.

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