Jefferies and Morningstar analysts issue sell ratings on Palantir and SpaceX, warning that aggressive valuations and competitive pressures could trigger sharp corrections exceeding 50%.
Brent Thill at Jefferies has a sell rating with a target of $80, implying 53% downside due to valuation concerns and competition from Anthropic.
Nicolas Owens at Morningstar has a sell rating with a target of $62, implying 58% downside due to overvaluation and uncertainty around Starship and orbital data centers.
Wall Street analysts are sounding the alarm on high-flying AI stocks Palantir and SpaceX, citing extreme valuation concerns. Despite significant revenue growth, experts at Jefferies and Morningstar warn that current share prices are disconnected from fundamentals, projecting potential declines of 53% and 58% respectively.
Analysts cite an unfavorable risk-reward profile, noting that the stock's 68x sales multiple requires unrealistic durability assumptions and faces rising competition from faster-growing rivals like Anthropic.
SpaceX reported negative free cash flow of $25 billion in the first half of 2026, suggesting the company could exhaust its $100 billion cash reserve within two years if current investment levels persist.