Palantir’s stock has outperformed the S&P 500 by a wide margin in recent years, but Raymond James has concerns about the stock’s valuation.

Palantir has a high valuation as suggested by analysts belonging to Raymond James research house. The stock could reverse soon.

Palantir Technologies (PLTR) stock has been climbing lately, but today it's off its peak price. Analysts have also been raising their price targets, but PLTR stock is still over those targets. One way investors can play this is to sell short out-of-the-money puts.

Shares of Palantir Technologies Inc. PLTR shed 2.77% to $36.90 Tuesday, on what proved to be an all-around favorable trading session for the stock market, with the S&P 500 Index SPX rising 0.25% to 5,732.93 and the Dow Jones Industrial Average DJIA rising 0.20% to 42,208.22.

Palantir and Dell are joining the S&P 500 Monday along with Erie Indemnity, replacing a trio of stocks that are shifting to some of S&P Global's smaller indexes.