Morgan Stanley assigned a new analyst to cover hot artificial intelligence stock Palantir Technologies, and the Wall Street firm joined the ranks forecasting worse times ahead for the stock.

Shares of data-analytics firm Palantir Technologies now have an Underweight rating from Morgan Stanley analyst Sanjit Singh, and a $60 target price.

Shares of Palantir (PLTR) dropped more than 5% on Monday as the stock reacted to a new rating from Wall Street. Analysts from Morgan Stanley re-initiated coverage of Palantir with a “sell” recommendation.

Palantir stock faces a potential correction after a Morgan Stanley downgrade to 'Underweight' with a $60 price target.

Palantir falls as Morgan Stanley assigns an Underweight rating, citing valuation concerns despite strong AI-driven growth and government contracts.

Bears criticized Palantir’s valuation for months as shares climbed higher. Is Wall Street paying more attention to the multiple now?