NEW YORK, Feb 5, 2026, 15:34 EST — Regular session
- Palantir down 7.3% at $129.30 in late afternoon trading
- Stock extends a two-day reversal after an earnings-driven jump on Tuesday
- Investors eye Big Tech AI spending and whether software demand holds up
Palantir Technologies Inc shares fell $10.24, or 7.3%, to $129.30 by 3:22 p.m. EST on Thursday, pushing the stock toward the bottom of the day’s $128.32-$137.98 range. 1
The move adds to a sharp pullback that has caught traders off guard: Palantir surged after earnings, then started giving it back fast. It is one of several high-multiple software names being repriced in a market that has turned jumpy about AI winners and losers.
Why it matters now is simple: investors are starting to treat AI as both growth and threat. The S&P 500 software and services index fell 3.1% and has been on track to shed about $1 trillion in market value since Jan. 28, as worries grow that new AI tools could upend existing software business models. “The uncertainty around the eventual impact of AI” means near-term results may not settle the debate, Goldman Sachs strategist Ben Snider said. 2
Palantir became a lightning rod this week after it reported quarterly sales of $1.41 billion and said U.S. government revenue climbed 66% to $570 million. Shares jumped 6.9% in early trading on Tuesday, even as Reuters noted the stock still traded at a forward price-to-earnings ratio of about 131 — a measure comparing the share price to expected earnings. 3
The company also forecast first-quarter revenue above estimates and projected 2026 revenue of $7.18 billion to $7.20 billion, according to LSEG data cited by Reuters. “Valuation question marks won’t disappear,” said eToro analyst Zavier Wong, adding that Palantir “remains priced for perfection.” 4
Then came the snapback. Palantir slumped almost 12% on Wednesday, reversing the prior day’s jump as investors fretted about pricey valuations and whether Wall Street’s AI rally had run too far. “The market is suddenly skeptical and concerned,” said Jed Ellerbroek, a portfolio manager at Argent Capital. 5
Thursday’s selling ran alongside fresh anxiety over Big Tech spending. Alphabet said it could lift 2026 capital spending as high as $185 billion, and strategists said markets are wrestling with whether that outlay will translate into profits. “We’re seeing this volatility about whether this investment will translate, ultimately, into results,” said Tom Hainlin, an investment strategist at U.S. Bank Wealth Management. 6
A separate pressure point: a Form 4 filed on Feb. 4 showed Palantir director Alexander D. Moore sold 20,000 Class A shares on Feb. 2 in open-market transactions under a Rule 10b5-1 plan, a pre-arranged trading program. 7
But the bigger risk isn’t one insider sale. Palantir is still valued like a company that has to keep surprising to the upside, while the whole software group is being questioned. Any sign that federal contract momentum slows, commercial demand cools, or AI tools start shaving prices across the sector could keep the stock swinging.
Peers tied to the same trade have been hit, too. ServiceNow, Salesforce and Microsoft were among the software names sliding again on Thursday, showing the selling is not just about Palantir’s quarter.
Next up, traders will look for any sign the broader tech selloff is easing, with Amazon due to report earnings after the close on Thursday — another test of how much AI spending markets will tolerate. 8
