Palantir falls as Morgan Stanley assigns an Underweight rating, citing valuation concerns despite strong AI-driven growth and government contracts.

Shares of Palantir (PLTR) dropped more than 5% on Monday as the stock reacted to a new rating from Wall Street. Analysts from Morgan Stanley re-initiated coverage of Palantir with a “sell” recommendation.

Palantir and Nvidia were among the top five winners of the Nasdaq 100 Index for 2024, up roughly 340% and 171%, respectively. The two companies are leaders in their industry. Nvidia focuses on artificial intelligence hardware,

Shares of data-analytics firm Palantir Technologies now have an Underweight rating from Morgan Stanley analyst Sanjit Singh, and a $60 target price.