Wall Street Recommends Selling Palantir and Upstart Amid Risks

Market concerns rise as analysts predict significant downside for Palantir and Upstart. Wall Street insurers advise caution amidst economic unpredictability and high valuations.

Date: 09-05-2025

AI Rating: 5

Current Market Overview
The S&P 500 has experienced a 4% decline year-to-date due to economic uncertainty fueled by trade policies. Specific companies like Palantir Technologies (PLTR) and Upstart Holdings (UPST) are facing significant scrutiny from Wall Street analysts concerning their stock valuations and future outlooks.

Palantir Technologies: The data analytics company achieved a remarkable revenue growth of 39%, totaling $884 million, along with an increase in customer spending by 124%. The non-GAAP earnings rose by 62% to $0.13 per diluted share, yet it remains subject to heavy criticism regarding its stock valuation. Analysts such as Rishi Jaluria from RBC Capital have set a target price of $40, indicating a concerning 64% downside from its current trading price of around $110. Despite its strong numbers, the high price-to-sales ratio and investor worries over valuation contribute to its downtrend. Therefore, while Palantir's revenues and customer metrics are robust and exceed expectations, its expensive valuation leads to a rating of 5.

Upstart Holdings: This AI lending platform reported a remarkable increase in revenue by 67% to $2.1 billion and achieved non-GAAP earnings of $0.30 per share, a significant improvement. However, Michael Ng from Goldman Sachs has assigned a price target of $15, implying a daunting 67% downside from its current share price of $46. Despite good growth prospects, concerns about its dependence on the economic environment and its valuation, especially amid potential recession risks, overshadow the company's positive performance. Given these factors, while Upstart shows strong earnings and revenue growth, the high risks combine for a cautiously optimistic outlook yielding a rating of 6.

In conclusion, while both companies show evidence of strong business fundamentals through revenue growth and earnings uplift, the overarching concern remains their valuations and economic conditions affecting their respective industries. Investors may find a renegotiation of entry points more prudent to mitigate risks.

Stocks: PLTR UPST