Palantir Stock PLTR Drops 5.5% as Valuation Fears and Software Selloff Hit AI Momentum

Palantir Technologies Inc. (NASDAQ: PLTR) closed at $107.27, down 5.50% on the day, as the AI software stock extended its slide and traded near a fresh 52-week low. Shares recovered slightly after hours, rising 0.65% to $107.97.

The selloff reflects a tougher backdrop for high-multiple software names, with investors rotating away from richly valued AI-linked stocks as rate concerns, valuation pressure, and contract risks weigh on sentiment.

Palantir Slides as AI Software Trade Loses Steam

According to the reference articles, Palantir has now fallen for several consecutive sessions and is down sharply for the month. The stock has lost nearly half its value from its record closing high near $207.18 in November 2025.

The pressure is coming from several fronts:

• A broader software and AI-stock derating
• Concern over Palantir’s premium valuation
• Technical support breaks near the $127 area
• European government contract concerns
• Continued attention around Michael Burry’s bearish PLTR positioning

With Palantir still trading at a high earnings multiple, investors have been less willing to defend the stock as momentum weakens.

European Contract Risks Add Pressure

Palantir’s government business remains a key part of its long-term story, but recent headlines have increased investor caution.

In France, domestic intelligence officials are reportedly moving away from Palantir tools toward a local alternative. In the U.K., political scrutiny remains focused on Palantir’s NHS Federated Data Platform contract, including a possible 2027 break clause.

These issues do not erase Palantir’s long-term growth case, but they add uncertainty at a time when the stock is already technically fragile.

Palantir Bulls Still Point to AI Workflow Growth

Despite the selloff, the bull case has not disappeared.

Palantir continues to position itself as more than a traditional software provider. Its Gotham, Foundry, and AIP platforms are designed to sit inside high-stakes workflows across government, defense, healthcare, manufacturing, and enterprise operations.

The reference article notes that U.S. commercial revenue and deal activity remain strong, while Palantir’s high margins and free cash flow profile continue to support the long-term platform thesis.

That said, the market is no longer rewarding growth at any price. Until valuation fears ease or the chart stabilizes, PLTR remains vulnerable.

PLTR Technical Analysis: Breakdown Deepens Below $109

Palantir’s daily technical setup is firmly bearish after the latest decline.

PLTR closed at $107.27, below every major moving average listed on the daily chart. The 10-day EMA at $122.11, 10-day SMA at $124.31, 20-day EMA at $128.36, and 20-day SMA at $133.70 all flash sell signals, confirming short-term pressure.

The broader structure is also weak. PLTR remains below the 50-day EMA at $135.49, 100-day EMA at $142.27, 200-day EMA at $144.85, and 200-day SMA at $159.09. That shows sellers remain in control across short-, medium-, and long-term timeframes.

Momentum indicators also lean bearish. The RSI at 27.37 is neutral but near oversold territory, while Momentum at -22.94 and MACD at -6.64 both show sell signals. The Hull Moving Average at $109.08 is the nearest short-term resistance.

Key Levels to Watch for Palantir Traders

• Resistance: $109.08, $122.11, $124.31, $128.36, $133.70, $135.49
• Support: $107.00, $100.00, $95.00, $90.00
• Bullish reversal level: A daily close above $109-$110
• Bullish continuation level: A break above $128-$134
• Bearish risk level: A break below $100

What’s Next for Palantir (PLTR) Stock?

If PLTR fails to reclaim the $109-$110 zone, sellers may continue targeting the psychological $100 level. A break below $100 would weaken sentiment further and could expose $95 and $90.

A close back above $110 would ease immediate pressure, but bulls likely need a stronger move above $122-$128 to show that the breakdown is stabilizing.

For now, the technical bias remains bearish while PLTR trades below its moving-average stack and near 52-week lows.