New York, Feb 5, 2026, 4:26 PM EST — After-hours
Palantir Technologies’ stock dropped further in after-hours trading Thursday, deepening a sharp two-day decline. Investors continued unloading shares of software and data companies tied to rapidly evolving artificial intelligence technologies. The share price slipped roughly 1.4% to $130.01 following the market close.
The selling is crucial now, with a broad selloff wiping out hundreds of billions from software and services stocks. Investors are wrestling with whether new AI “agents” might replace parts of traditional apps — and how to price companies amid shifting business models. Reuters noted the software and services sector has lost about $830 billion in market value since Jan. 28, following a fresh wave of AI-product launches that rattled investors. 1
That unease spilled over to megacaps. Wall Street plunged on Thursday as investors fretted over the size of AI investments and doubts mounted about when profits might follow, after Alphabet signaled a potential surge in capital spending. 2
Palantir (PLTR.O) closed the regular session down 5.5% at $131.83, with shares fluctuating between $128.32 and $137.98 during the day, according to Yahoo Finance data. The stock saw roughly 67.8 million shares change hands. 3
The stock plunged roughly 12% the day before, dragged down by what Reuters called a spillover from the software selloff into more volatile “AI trade” stocks. 4
Traders haven’t jumped at the chance to buy the dip. “Our customers generally aren’t as keen to buy dips in software compared to precious metals and semis,” said Steve Sosnick, chief strategist at Interactive Brokers, in a Reuters interview. Susquehanna’s Chris Murphy added that options flow was still “overwhelmingly defensive.” 5
The latest surge was sparked by a fresh leap in AI capability. Anthropic unveiled Claude Opus 4.6, highlighting improvements in coding and finance, and introduced “tokens” — the text and data chunks AI models crunch — now able to handle much larger prompts. “We are excited to partner and actually lower the floor to get more value out of those tools,” Scott White, Anthropic’s head of product for enterprise, told Reuters. 6
The “replacement” story is now creeping into services as well. Jefferies flagged worries that automation from Anthropic and Palantir is stoking fears about tighter project deadlines in labor-intensive IT work. The firm warned, “there is more pain ahead for Indian IT,” with AI potentially eating into high-margin application services revenue. 7
Big Tech’s spending remains under the microscope. Amazon forecast roughly $200 billion in capital expenditure for 2026, Reuters reported. Shares dipped in after-hours trading as Wall Street pressed for clearer returns on the AI push. 8
Another way to look at it: if AI tools mainly enhance productivity within established firms instead of replacing them, the market might be overreacting to the risks. That said, signs of a slowdown in enterprise software spending or proof that “agent” tools are cutting into the business of legacy vendors could continue to weigh on high-multiple stocks like Palantir.
Palantir faces reputational risks tied to its government-related projects. On Feb. 4, New York City Comptroller Brad Lander’s office sent a letter urging Palantir to commission a third-party human-rights risk assessment. It underscores how certain investors remain vigilant about the applications of the company’s technology. 9
Traders are keeping an eye on key macroeconomic data that could shift rate expectations. The U.S. Employment Situation report for January comes out on Feb. 11, with the January CPI following two days later on Feb. 13, per the Bureau of Labor Statistics calendar. 10
Palantir faces a straightforward challenge: will selling pressure ease once U.S. markets reopen Friday, or will fresh AI “agent” updates and capex discussions drag the stock further into the software sector’s decline?
