Key Takeaways:
- Palantir shares fell 5.8% to $106.88, near a 52-week low
- The stock has dropped roughly 40% in 2026 during a broad software selloff
- Q1 revenue surged 85% to $1.63 billion, but valuation at 144x earnings remains stretched
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Palantir drops 5.8% to 52-week low, extends losing streak to 7
Palantir Technologies Inc. fell 5.8% to $106.88 on Thursday, touching its lowest level in more than a year and extending a seven-session losing streak.
"The derating reflects a market that's repricing extreme multiples across the software space, and Palantir is at the center of that rotation," said Dan Ives, an analyst at Wedbush Securities who rates the stock outperform with a $230 price target.
The stock has lost roughly 40% of its value in 2026, making it one of the worst performers in the iShares Expanded Tech-Software Sector ETF, which is down 15.7% year to date. Palantir's relative strength index has slipped into the mid-30s, a technically oversold zone. The selloff has erased more than $180 billion in market value from the company's peak.
The decline leaves Palantir trading at about 144 times trailing earnings with a free cash flow yield under 1%, levels that leave little room for error as capital rotates out of high-multiple software names. The next catalyst is the company's second-quarter earnings report, due in early August, where management has guided for revenue of $1.8 billion.
No single fresh headline drove Thursday's decline. Traders pointed to a combination of factors: a continuing rotation out of expensive software stocks — dubbed the "SaaSpocalypse" by some market participants — alongside company-specific headwinds including reports that France's domestic intelligence agency is transitioning off Palantir's tools and renewed scrutiny of its contract with the UK's National Health Service.
Michael Burry of Scion Asset Management holds a publicized short position on Palantir, adding to the bearish narrative as the stock breaks below key technical levels.
The bear case centers on valuation. Even after the 40% decline, Palantir's price-to-book ratio stands at 35 times, and its enterprise value of roughly $270 billion represents more than 100 times trailing free cash flow of $2.7 billion. The software sector's derating has compressed multiples across the board, and Palantir's premium has narrowed but not disappeared.
The bull case remains intact on fundamentals. First-quarter revenue reached $1.63 billion, up 85% from a year earlier, with U.S. commercial revenue surging 133% to $595 million. The company posted GAAP operating income of $754 million, a 46% margin, and closed 206 deals worth $1 million or more with total contract value of $2.41 billion. Management raised full-year revenue guidance to as much as $7.66 billion and projected adjusted free cash flow of $4.2 billion to $4.4 billion. Palantir's Rule of 40 score — a measure of growth plus profitability — stood at 145%, a level few software peers can match.
The $100 level has emerged as a psychological floor for the stock. Some retail traders have indicated they would step in to buy if Palantir dips below that threshold, according to posts on StockTwits. Whether the stock holds that line or breaks lower will likely depend on the broader software sector's direction and any further developments in Palantir's international contract portfolio.
This article is for informational purposes only and does not constitute investment advice.
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