"AI giant stock" Palantir (PLTR.US) skyrocketing is not sustainable? Jefferies Financial Group Inc. warns: executives are cashing out, only giving a target price of $28.

The stock price of Palantir (PLTR.US) performed very well in 2024, with a gain of over 250% so far, as the company found growth momentum through its artificial intelligence products. However, analysts at Jefferies Financial Group Inc. pointed out that this multiple expansion seems unsustainable. They cited the recent stock sales by Palantir's CEO as an example. Jefferies Financial Group Inc. rated Palantir as "underperform" with a target price of only $28. Lead by Brent Thill, the analysts at Jefferies Financial Group Inc. stated in an investor report, "We highlight that as the stock price rises, the frequency of insider sales through 10b5-1 rule trading plans is increasing. Palantir's CEO Alex Karp has sold nearly 40 million shares in the past 3 months, totaling over $1.9 billion, and over 18 million shares in the past two weeks, totaling over $1 billion. While he has sold about 20% of his total holdings, his current 10b5-1 trading plan allows for another approximately 9 million shares to be sold before May 2025. This could add further pressure on the stock." Additionally, Thill pointed out that while Palantir's revenue outlook for the calendar year 2025 has increased by 11% year to date, its revenue multiple for the next 12 months has grown by 202% during the same period, with the current EV to NTM revenue ratio at 43 times. Thill added, "The last time we saw such high multiple expansion was during the bubble of the pandemic, when multiples of many high-growth companies expanded significantly at the same time."