Palantir Shares Extend Slump After Earnings‐Fueled Rally Falters

August 20, 2025 (New York) - Palantir Technologies Inc. (NASDAQ: PLTR) shares reached record highs earlier this month. On Wednesday, they fell sharply for the sixth day in a row. This decline points to a larger trend away from top AI stocks.

Shares closed Tuesday at $157.00, down 9.0% for the day and more than 15% below their early-August peak near $180. In pre-market trading on Wednesday, Palantir fell again, sitting near $155 as investors took profits.

The extended sell-off comes after Palantir’s strong second quarter. The company reported its first $1 billion revenue quarter. It also saw a 48% year-over-year growth. This surge was driven by rising U.S. commercial and government contracts. The stock has solid fundamentals, but it now trades at a forward price-to-earnings ratio over 245 times. Analysts say this is “extreme” compared to peers like Microsoft and Apple, which are in the 20–30× range.

Technical analysts note that Palantir is testing key support at the $156 level. If it falls below, we might see prices drop further to $150 or even $148. That’s where there was earlier consolidation. Conversely, reclaiming $166 would be needed to restore upward momentum.

Short-seller Andrew Left from Citron Research added to the pressure on Monday. He published a bearish report, setting a $40 target for Palantir. He argued that Palantir is “beyond overvalued,” even compared to OpenAI’s high multiples. His report helped trigger additional selling, according to market observers.

Selling in Palantir is part of a bigger “tech-to-value” shift. Investors are moving money from AI growth stocks to safer, more stable sectors. The Nasdaq Composite, full of tech stocks, dropped over 2% this past week. In contrast, healthcare and utilities did better.

CEO Alex Karp keeps a confident tone in his messages to shareholders. He refers to skeptics as “defanged and bent into submission” as the company expands its platform. Analysts at Wedbush and Bank of America Securities have lowered their ratings. They mentioned valuation concerns but still believe in Palantir’s long-term growth.

Palantir is down almost 20% from its peak and near its 50-day moving average. Traders are closely watching the $155–$156 zone for signs of stabilization. Currency markets are calm as we wait for the Fed minutes today. These minutes could impact high-beta stocks like PLTR.