Cathie Wood Is Dumping Palantir Stock at Record Highs. Should You?

Palantir (PLTR) shares have been ripping to the upside in recent months with analysts like Dan Ives even predicting a $1 trillion market cap for the big data analytics firm in the coming years.  

However, influential investor Cathie Wood has been trimming exposure to the Denver, Colorado-based company to load up on the likes of GitLab (GTLB) instead. 

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At the time of writing, Palantir stock is up some 115% versus its year-to-date low. 

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Why Did Cathie Wood Sell Palantir Stock?

The chief executive of Ark Invest unloaded close to 56,000 shares of PLTR this week worth about $7.4 million in total across three of her exchange-traded funds (ETFs). 

Wood hasn’t publicly disclosed the reason for selling Palantir stock – but it’s reasonable to assume that valuation concerns may have played a role in her decision. 

PLTR is currently going for a forward price-earnings ratio of well over 200x, which dwarfs the multiples on other high-growth stocks, even including Nvidia (NVDA).

In fact, it’s perhaps fair to state that at current valuation, Palantir is a name that has defied all traditional valuation metrics. 

Citi Sees Downside in PLTR Shares to $115

In his latest research, Citi analyst Tyler Radke also cited valuation concerns as he maintained his “Neutral” rating on the Nasdaq-listed firm. 

Radke agreed that PLTR is seeing rapid adoption of its Artificial Intelligence Platform (AIP) and is keeping disciplined on the margins front as well, partly by optimizing headcount. 

Additionally, the company is seeing success with commercial expansion while the government segment remains strong, the analyst told clients.  

Still, citing valuation concerns, Radke reiterated his $115 price target on the Cathie Wood stock that signals potential downside of more than 15% from here. 

Wall Street Has a Consensus ‘Hold’ Rating on Palantir

Investors should also note that Citi is still among the more bullish Wall Street firms on Palantir shares. 

The consensus rating on PLTR stock currently sits at “Hold” only with the mean target of about $95 indicating potential downside of more than 30% from current levels. 

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On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.