Citi is sounding caution on Palantir Technologies (PLTR), warning investors that the stock’s lofty valuation may be difficult to justify as the company’s AI advantage evolves.
In a new CNBC interview, Tyler Radke, senior equity research analyst at Citi, warns that PLTR may be overvalued after rising by 107% year-to-date.
He also says that at current levels and the way the AI industry is developing, Citi is not ‘particularly excited’ about PLTR’s risk-reward profile.
“This stock, even despite its slide, is still trading at around 70x forward revenue. So it’s very much on the high end of the valuation range.”
Palantir’s meteoric run has made it one of the most closely watched names in AI. The company reported one of the biggest beats and raises seen from a public firm, with cash flow margins above 40%. Yet Citi argues that early leadership is not a guarantee of long-term success.
Radke notes that Palantir has carved out a niche with its flagship data ontology product, which helps governments and enterprises organize their data for AI deployments. But he questions the durability of that edge.
“Palantir is a unique company… but over time, you combine the resources that everybody else has out there, plus the power of this technology, it’s unclear to me if that edge is sustainable.”
The analyst also points out that Palantir’s current advantage rests on a transitional moment in the industry.
“I think this data organization phase that we’re in, that’s going to evolve. That’s kind of the early stage of this AI market.”
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