Palantir stock falls 9% as tech and AI shares drop amid market shift
shares fell 9% on Tuesday to $157.91, wiping out gains from its recent strong earnings report and full-year guidance boost. The stock has dropped for five straight days, losing 15.5% since August 13. Analysts and multiple outlets linked Palantir's fall to a Citron Research report saying the stock is overvalued, as per reports
Citron compared Palantir to OpenAI, which is valued at $500 billion, and said that if OpenAI's price-to-sales ratio applied to Palantir, its stock would fall to $40 per share. Palantir reported $1 billion in revenue this quarter, the first time it has crossed the milestone, as reported by Forbes.
Palantir revenue growth
Palantir shares had risen over 150% from their April low, driven by strong AI tools and earnings. The company secured a $10 billion deal with the U.S. Army, consolidating 75 contracts into one agreement. Palantir expects full-year revenues of $4.14 billion to $4.15 billion, up from the previous estimate of $3.89 billion to $3.90 billion, as mentioned in the reports.
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The Trump administration's push for AI and chip infrastructure in the U.S. is boosting companies like Palantir, NVIDIA, Apple, OpenAI, and Intel. Other tech stocks also fell Tuesday, NVIDIA down 3%, Meta down nearly 2%, and the Nasdaq down 1.4%. Cryptocurrency stocks slid too: Coinbase fell nearly 5%, Robinhood more than 5%, and Bitcoin dropped 2.4% amid a two-day crypto pullback, as stated by Forbes.
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Tech stocks slide
Palantir's five-day losing streak is its longest since March. Citron founder Andrew Left called their $40 price target for Palantir 'generous'. The Technology Select Sector SPDR Fund (XLK), tracking tech stocks, fell 1.7% Tuesday. Other AI and tech names saw losses: NVIDIA down 3.5%, AMD down 5%, and Meta down 2%. The tech sector overall lost more than 2.4% over the past five sessions, as per the Yahoo Finance report.
The broader market rally is shifting toward sectors beyond Big Tech, like Health Care, Homebuilders, and small/mid-cap stocks, which rose 4% and 3% respectively in the last five days. Defensive sectors such as Real Estate, Utilities, Materials, Consumer Staples, and Health Care were the biggest gainers on Tuesday.
Because Big Tech has a large weight in indexes, S&P 500 gains are less sharp when tech underperforms; Tuesday, the S&P 500 fell over 0.5%, and the Nasdaq nearly 1.5%. Citi strategist Scott Chronert said the market is on 'two parallel paths': AI growth giants continue leading, while traditional sectors are adding stability, creating a healthier market setup. Chronert added that the 'healthiest path' for the S&P 500 is a mix of continued tech growth and broader sector support, as per Yahoo Finance.
FAQs
Q1. Why did
Palantir stock fall
recently?
Palantir stock fell due to a Citron Research report calling it overvalued and overall tech market losses.
Q2. How much revenue did Palantir make this quarter?
Palantir reported $1 billion in revenue this quarter, the first time it crossed this milestone.
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