What Happened?

Shares of data-mining and analytics company Palantir (NYSE:PLTR) fell 6.1% in the morning session after Jefferies analysts reiterated a Sell rating, raising concerns about the stock's valuation. The analysts added, "This positive momentum is baked into PLTR's valuation at 45x CY26E, the most expensive stock in our coverage. Fundamentals have been strong, but valuation remains the biggest concern, and insiders continue to sell, with co-founder Stephen Cohen selling another $310M in shares over the past few days."

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Palantir? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Palantir’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 6 days ago when the stock gained 7% after the company revealed new commercial customers, including Walgreens Boots Alliance and Heineken. This signaled that Palantir's commercial business was gaining traction beyond its traditional government contracts. Signing up major names like Walgreens Boots Alliance and Heineken highlighted a shift that could help diversify its revenue streams. 

Analysts like Louie DiPalma of William Blair saw this as a sign that Palantir's commercial momentum remained strong. Investors would likely watch closely to see if this trend continues, as expanding in the private sector could be key to the company's long-term growth. 

Separately, markets experienced a boost after data from the Bureau of Labor Statistics revealed that inflation for the month of February 2025 came in better than expected. The CPI rose 0.2% from the previous month (vs estimates for a 0.3% increase), while headline inflation rose 2.8% year on year (vs estimates for a 2.9% y/y increase). The data revealed inflation continued to edge closer to the Fed's 2% target, but not quite there yet. The reaction wasn't anything wild, but the sentiment leaned positive. The Nasdaq led the way, climbing 1.4%, boosting some tech stocks.

Palantir is up 11.9% since the beginning of the year, but at $84.11 per share, it is still trading 32.5% below its 52-week high of $124.62 from February 2025. Investors who bought $1,000 worth of Palantir’s shares at the IPO in September 2020 would now be looking at an investment worth $8,853.

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