Investing.com -- William Blair analysts issued a cautionary note on Palantir Technologies (NASDAQ:PLTR), highlighting potential downside risk for the stock despite continued commercial momentum.

The firm acknowledged a series of new customer announcements at Palantir’s upcoming AIPCon conference, which suggest that the company’s commercial progress is ongoing.

Notably, the firm said Palantir’s commercial tracker revealed nine new logos, including Walgreens, R1 RCM (NASDAQ:RCM), KKR, and Delta Air Lines (NYSE:DAL).

Despite this positive development, William Blair remains cautious about Palantir’s valuation, stating that it still appears “frothy.”

The analysts pointed out that, while the new customers show strong commercial growth, the stock price has been highly correlated with Nasdaq-100 movements.

The note emphasized that Palantir shares declined 10% following a 4% selloff in the Nasdaq, and if the broader market continues to decline, Palantir could see further downside risk.

“Palantir’s stock has demonstrated a very high beta correlation with the Nasdaq-100,” they noted. “If the Nasdaq-100 continues to trend lower, Palantir shares will likely also decline, potentially by a 3-times factor of the market due to its high beta.”

While the company’s revenue growth guidance of 31% for 2025 and operating margin of 45% remain impressive, William Blair cautioned that the stock's high volatility presents risks for investors.

The analysts believe that despite Palantir's commercial successes, downside risk persists due to market conditions and its high beta exposure.

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