Analyst: Don't Buy The Hype On Palantir's AI Advantage

Put traders are targeting the equity after the note

Deputy Editor
Jan 5, 2024 at 10:36 AM
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Palantir Technologies Inc (NYSE:PLTR) is 1.8% lower to trade at $15.86 this morning, after Jefferies downgraded the stock to "underperform" from "hold." The Wall Street analyst said the company's near-term artificial intelligence (AI) lead is overhyped, and PLTR's resulting surge on the charts puts it at "unsustainable valuation levels."

Options traders are moving to bearish bets following the note. So far, today's put volume of 53,000 is running at double the average intraday amount, though 69,000 calls have also been traded -- nearly double the volume typically seen at this point. These traders are getting a bargain, too, per Palantir stock's Schaeffer's Volatility Index (SVI) of 47% that ranks higher than just 1% of readings from the last 12 months. 

Short interest is beginning to unwind, down 26% in the two most recent reporting periods. The 108.58 million shares sold short still account for 5.6% of PLTR's total available float. 

On the charts, Palantir stock continues to pull away from its Nov. 21, two-year high that touched just shy of the $22 level. The equity is poised to close below the $16 mark for the first time since late-October as well, though they remain up 153% over the last 12 months. 


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