Shares of data analytics firm Palantir (PLTR) are down 4% after analysts at Jefferies Financial Group (JEF) downgraded the stock, saying that hype related to artificial intelligence (A.I.) is overblown.
Jeffries lowered its rating on Palantir’s stock to “underperform” (sell) from “hold” previously and lowered its price target on the shares to $13 U.S. from $18 U.S.
While Jefferies says that Palantir still has an advantage in A.I., its valuation has become unsustainable after gaining more than 150% in the past 12 months.
“We underestimated the severity of the slowdown in Palantir’s commercial and government businesses,” wrote Jeffries in a note to clients.
Palantir’s stock has risen 157% over the past year to trade at $16.25 U.S. per share.
The company is currently engaged in a public dispute with the U.S. Army, one of its largest customers, over the ownership of data.
