Cramer: Palantir Buying Surge Imminent as Morgan Stanley Initiates Underweight Rating

Palantir Technologies Inc. (PLTR) investors, brace yourselves for a potential buying surge tonight, as Jim Cramer, the outspoken host of CNBC's Mad Money, predicts a late-day rally in response to Morgan Stanley's initiation of an underweight rating on the stock. The analyst, Sanjit Singh, set a price target of $60, indicating a significant discount to the current price of $75.92.



Cramer's prediction comes as Morgan Stanley resumes coverage of Palantir after a temporary suspension in November. Singh acknowledged the company's strong performance in U.S. commercial and government sectors but expressed concerns about the stock's valuation after its 350% gain in 2024. He noted that Palantir trades at an 80% premium compared to high-growth software peers, suggesting that the stock's rally may have been driven more by multiple expansions than by fundamentals.



However, Cramer's bullish stance on Palantir is not an isolated opinion. In April, he recommended buying the stock, predicting a more than 25% upside in its share price. Bank of America Securities analyst Mariana Perez Mora also raised her price target on PLTR shares to $50, suggesting a potential upside of another 40% from the current level. The analyst cited Palantir's strong performance in the AI sector and its potential for long-term growth as reasons for her bullish outlook.



Palantir's AI platform, which offers tailored solutions that deliver added value to customers, has been a significant driver of its growth. The company's commitment to diversifying its customer base and unlocking the next phase of growth further enhances its value proposition. With a 12% year-over-year increase in adjusted operating margin to 37% in its latest reported quarter, Palantir has demonstrated exceptional pricing power and profitability.

As investors await the potential buying surge in Palantir tonight, it is essential to consider the mixed opinions among analysts regarding the company's valuation. While some analysts, such as Morgan Stanley's Singh, express concerns about the stock's valuation after its significant run-up in 2024, others, such as Jim Cramer and Mariana Perez Mora, remain bullish on the company's prospects. Ultimately, the market's reaction to Morgan Stanley's underweight rating will determine whether Cramer's prediction of a late-day buying surge comes to fruition.