Palantir stock price forecast: PLTR could slip by 18% soon

Palantir Technologies (NYSE: PLTR) stock price has recoiled recently as the AI hype fades and after a downgrade by Morgan Stanley. The shares retreated to a low of $15.27 on Friday, a ~24% decline from the year-to-date high. This means that the company has moved into a bear market.

Growth concerns remain

Palantir Technologies' share price has done well this year, helped by the ongoing hype on Artificial Intelligence. It has soared by more than 150% from the lowest level this year.

Palantir’s rally has a close similarity to that of Nvidia, a company whose market cap soared to over $1 trillion earlier this year. In addition to the AI hype, the stock is benefiting from a recently announced $1 billion share buyback. 

Still, there are lingering concerns about Palantir. The most important issue is the company’s valuation. It has a market cap of over $32 billion, which is a bit stretched considering it made $1.9 billion in 2022 and made a loss of over $300 million.

The most recent results showed that Palantir is not growing fast enough. Its revenue came in at $533 million, representing a 12% YoY growth. It missed analysts’ estimates by more than $550k.

The other concern, which was highlighted by Morgan Stanley analysts is about AIP, its artificial intelligence product. The issue is that the company could struggle to monetize it in the long term.

To be clear. Palantir Technologies is a great company that has strong recurring revenue from governments and big companies like Airbus, Novartis, and Jacobs Engineering. These entities are highly reliable, often have minimal churn, and continually add to their purchases. 

However, the company is priced for perfection, which can be challenging in terms of execution. 

Palantir stock price forecast

PLTR chart by TradingView

The daily chart points to more PLTR stock price weakness. For one, the shares have dropped below the 50-day moving average. They have also formed a head and shoulders pattern, which is usually a bearish sign. The current price is a few points below the right shoulder.

At the same time, the Relative Strength Index (RSI) has moved slightly below the neutral point. Therefore, there is a likelihood that the stock will have a bearish breakout.

If this happens, the next level to watch will be $12.45, the 200-day moving average. This price is about 18.60% below the current level.