Morgan Stanley initiated coverage of Palantir Technologies Inc. (NYSE:PLTR) with an underweight rating and $60 price target on Monday, prompting CNBC's Jim Cramer to predict a late-day buying surge in response.
What Happened: "Unless another analyst starts with a sell, I think we will see the buying in Palantir starting at around 3:30 [a.m.]," Cramer wrote on X, formerly Twitter.
Pre-market trading on Nasdaq generally takes place from 4:00 AM to 9:30 AM Eastern Time.
— Jim Cramer (@jimcramer) January 7, 2025
Unless another analyst starts with a sell i think we will see the buying in Palantir starting at around 3:30 a.,. tonight
The Morgan Stanley rating comes as analyst Sanjit Singh takes over coverage following the firm's temporary rating suspension in November. Despite acknowledging Palantir's strong performance in U.S. commercial and government sectors, Singh expressed concerns about the stock's valuation after its 350% gain in 2024.
"To put it bluntly, if executive management teams and decision makers want to get their AI initiative into live production environment rapidly, Palantir has emerged as one the select few partners to call," Singh noted while pointing out that the stock trades at an 80% premium compared to high-growth software peers.
The data analytics company, led by CEO Alex Karp, has seen its shares surge nearly 350% last year, closing at $75.92 on Monday. However, current analyst price targets range widely, from UBS' $80 to Wolfe Research's $7.5, according to data from Benzinga Pro.
Why It Matters: The divergent views on Palantir's valuation come amid growing interest from prominent investors. Recently, Cramer described the company as a "protective intellectual blanket" for his investing club portfolio, highlighting its appeal in the artificial intelligence sector.
The stock's remarkable run has been supported by strong investor sentiment and notable endorsements, including billionaire Stanley Druckenmiller's praise for Karp's book, "The Technological Republic."
However, Morgan Stanley's analysis suggests that while revenue estimates for 2025 have increased by only 10%, the stock's rise has been primarily driven by multiple expansions.
Price Action: Palantir stock closed at $75.92 on Monday, down 4.97%. In after-hours trading, the stock dropped slightly by 0.24%, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
