Palantir Technologies (PLTR) closed Friday, October 16, at $186.03, down 7.22% in a single session and 11.01% for the week. The drop left shares about 12.6% below their October 12 record close of $212.94 and erased roughly $34 billion in market value. A close below $188.15 put the stock more than 10% under its October 9 record close, confirming a correction.
The decline was part of a broader technology and software selloff. A basket of 45 software stocks lost more than $260 billion, including about $83 billion at Microsoft. The iShares software ETF lost nearly 5%, and the cybersecurity ETF CIBR was down about 10% for the week, its worst weekly performance since March 2020. Palo Alto Networks and CrowdStrike each fell roughly 18% for the week.
Palantir entered the week with strengthening analyst support. Goldman Sachs upgraded the stock from Neutral to Buy on October 8 with a $230 price target, while Barclays initiated coverage with an Overweight rating and a $265 target. Baird and Mizuho also raised targets to $250 and $245 respectively. The bullish calls argued that Palantir’s expanding AI business justifies higher valuations, but Friday’s selloff renewed debate over how much future growth investors should price into the stock.
Unlike heavily indebted AI infrastructure companies, Palantir has a strong balance sheet. Its second-quarter results showed $1.22 billion in adjusted free cash flow and about $9.2 billion in cash, cash equivalents and short-term Treasury securities. Second-quarter revenue rose 93% year over year to $1.935 billion, while US government revenue reached $809 million and US commercial revenue grew 149% to $764 million.
Palantir reports third-quarter results on November 2 after the market close. Management has guided for third-quarter revenue between $2.160 billion and $2.164 billion and adjusted operating income of $1.292 billion to $1.296 billion, with a full-year revenue outlook of $8.150 billion to $8.158 billion. The earnings report is now seen as the next major test for whether Palantir’s premium valuation can be sustained.
