Palantir Technologies Inc. (NASDAQ:PLTR) is experiencing a stock slump amid broader profit-taking following a robust post-earnings rally in August.
One potential factor contributing to Wednesday’s downturn could be the launch of Google Gemini 3.8 Flash and Flash Cyber by Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Michael Monaghan, a portfolio manager at Founders ETFs, told MarketWatch on Wednesday.
The new AI models, part of Google’s Fairwind Program, are geared towards government agencies and cybersecurity partners. Monaghan said that some investors view the development as a direct threat to Palantir’s government business.
Palantir’s stock had recovered from a 52-week low of $106.37 in late June, following strong second-quarter earnings in August. However, the stock declined 5.56% over the past week to fall below $170.
However, investors may be questioning Palantir’s ability to sustain this growth in the long term. “The company will need to continue ‘earning’ its valuation by outperforming expectations,” Monaghan added. He also noted that rising bond yields could impact higher-multiple stocks like Palantir.
Last month, Jefferies analyst Brent Thill expressed confidence in Palantir’s fundamentals but warned that its high valuation left little room for slower growth or execution missteps.
Palantir Beats Estimates, Faces Valuation Risks
In early August, the company reported an impressive second-quarter revenue of $1.94 billion, surpassing analyst estimates of $1.80 billion. The AI software company also reported adjusted earnings of 41 cents per share for the quarter, beating estimates of 35 cents per share.
Palantir CEO Alex Karp earlier said surging demand for "AI sovereignty" is creating major opportunities for the company. He highlighted an "otherworldly" quarter, with U.S. commercial revenue up 149%, total revenue rising 93% and its Rule of 40 score reaching 155%, expressing optimism about Palantir’s future.
Cathie Wood-led Ark Invest sold off a significant number of Palantir shares in late August. The firm sold a total of 139,456 shares across its ARK Blockchain & Fintech Innovation ETF (BATS:ARKF), ARK Innovation ETF (BATS:ARKK), and ARK Next Generation Internet ETF (BATS:ARKW) funds.
Meanwhile, on Wednesday, Palantir announced that former AIG CEO and Executive Chairman Peter Zaffino will join the company as Global Head of Financial Services on Jan. 15, 2027, overseeing growth across banking, insurance, asset management and private equity.
Benzinga’s Edge Rankings place Palantir Technologies in the 97th percentile for growth and the 2nd percentile for value, reflecting its mixed performance. Benzinga’s screener allows you to compare PLTR’s performance with its peers.
PLTR Price Action: Over the past month, PLTR stock surged 34.87%, as per Benzinga Pro. On Wednesday, it declined 5.81% to close at $169.46.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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