Palantir is experiencing a dramatic reversal from its meteoric rise, with shares plunging 9% Tuesday to cap a devastating five-day losing streak that's erased over 15% of the AI software provider's value. The selloff comes despite the company recently posting its first-ever $1 billion revenue quarter, highlighting how even stellar fundamentals can't shield high-flying tech stocks from market volatility.
Palantir just delivered a masterclass in how quickly Wall Street sentiment can flip. The artificial intelligence darling that had investors mesmerized with its government contract prowess and Trump-era tailwinds is now facing its harshest reality check since becoming a public company darling.
Tuesday's 9% nosedive marks the fifth consecutive day of losses, bringing the total carnage to over 15% from the record peaks that seemed untouchable just last week. The timing couldn't be more jarring – this selloff comes on the heels of what should have been a victory lap. Earlier this month, Palantir delivered its first-ever $1 billion quarterly revenue report, a milestone that initially sent shares soaring to all-time highs.
The broader market's Tuesday pullback provided the perfect excuse for profit-taking in one of 2025's most extreme success stories. Despite this week's beating, Palantir remains the S&P 500's most significant gainer this year, still sitting on gains exceeding 100%. That's a staggering performance that has catapulted the company into rarified air – the top 10 U.S. tech firms and 20 most valuable U.S. companies overall.
But here's where the story gets interesting – and potentially concerning for bulls. Palantir's meteoric ascent has created a valuation that would make even the most optimistic growth investor pause. The company's forward price-to-earnings ratio has rocketed past 245 times, a multiple that dwarfs virtually every other major tech player.
