SA analyst upgrades/downgrades: PLTR, AMD, AMAT, APP

[Bear and bull stock market]

Recent analyst actions include notable rating changes for Palantir Technologies (NASDAQ:PLTR [https://seekingalpha.com/symbol/PLTR]), Advanced Micro Devices (NASDAQ:AMD [https://seekingalpha.com/symbol/AMD]), Applied Materials (NASDAQ:AMAT [https://seekingalpha.com/symbol/AMAT]), and AppLovin (NASDAQ:APP [https://seekingalpha.com/symbol/APP]). Seeking Alpha analysts placed upgrades on both PLTR and AMD while also tagging shares of AMAT and APP with downgrades.

UPGRADES

Palantir Technologies (NASDAQ:PLTR [https://seekingalpha.com/symbol/PLTR]): Upgrade Hold to Buy by Tech Stock Pros [https://seekingalpha.com/article/4828151-palantir-not-on-armys-bad-side-upgrade]. Despite a 7.5% drop following reports of “fundamental security” problems in a U.S. Army battlefield communications project, analysts believe the impact will be limited since Palantir was a subcontractor rather than the lead on the project.

* _“The bottom line, however, is that Palantir was the subcontractor, rather than the lead on this project, while Anduril was the lead. We think the worst-case scenario here is a reputation hit… No tech stock grows in a straight line, and the pullback we got on Palantir last Friday is a healthy reset that we believe should be bought up. We see upside for Palantir through the year’s end and, hence, are upgrading the stock back to a buy.” _

Advanced Micro Devices, Inc. (NASDAQ:AMD [https://seekingalpha.com/symbol/AMD]): Upgrade to Buy by Joseph Parrish [https://seekingalpha.com/article/4828122-amd-game-changing-deal-with-openai-upgrade]. The analyst cites a transformative 6 gigawatt agreement with OpenAI as a game-changing catalyst that provides a clearer pathway to significant revenue growth.

* _“A big announcement about a deal with OpenAI could change the outlook entirely… I believe a pathway to revenue growth is more clearly paved now and upgrade the stock to Buy. The main adjustment I’ve made is to increase the baseline FCF estimate, annualizing the YTD adjusted FCF to about $3.4B. Increasing the CAGR the first five years to 30% reflects these newer growth opportunities.” _

DOWNGRADES

Applied Materials, Inc. (NASDAQ:AMAT [https://seekingalpha.com/symbol/AMAT]): Downgrade Buy to Hold by Perseus Perspectives [https://seekingalpha.com/article/4827977-applied-materials-stock-thesis-played-out-as-expected-valuation-less-attractive-downgrade-hold]. Despite AMAT’s robust long-term metrics including strong revenue, EPS and free cash flow growth, the recent 25% surge in share price makes its valuation less attractive for new investors.

* _“The attractive valuation entry point has evaporated, and both the technicals and valuation are looking overextended in the near term. This business is a proven winner over the long term so existing shareholders need not panic about short-term price extensions. New money, however, is best kept on the sidelines for now, as I’m confident a better entry will present itself in the not too distant future.” _

AppLovin Corporation (NASDAQ:APP [https://seekingalpha.com/symbol/APP]): Downgrade Buy to Hold by Danil Sereda [https://seekingalpha.com/article/4827782-applovin-the-party-is-nearing-its-end-rating-downgrade]. Following a 113% rally since his previous Buy call, the analyst believes the stock has reached a premium valuation that leaves little margin of safety for investors.

* _“Priced at 75x forward earnings after the YTD rally of 111%, the margin of safety seems to be gone now, and any news of slower-than-expected adoption in new verticals or a normalization of growth rates could trigger a sharp re-rating to the downside… I think the market may now punish APP for any minor misstep, sending it much lower under the pressure of its overvaluation.”_

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