Palantir Technologies Inc. (NYSE: PLTR) shares fell 3.43% on Monday, February 23, 2026, closing at $130.60 after trading as low as $127.39 and as high as $132.04. Volume reached approximately 52.3 million shares, slightly above average, as the AI software specialist faced pressure from broader market rotation, tariff-related uncertainty, and ongoing debate over its lofty valuation despite strong fundamentals.

Palantir co-founder and CEO Alex Karp believes the United States should be the 'strongest, most important country in the world'
Palantir co-founder and CEO Alex Karp AFP

The decline extended Palantir's year-to-date losses to around 27%, with the stock down roughly 35-39% from its all-time high of $207.52 set in November 2025. The pullback reflects a shift in sentiment toward high-growth software names amid concerns over sustainability of AI spending and elevated multiples.

Palantir's market capitalization stands at approximately $311-312 billion, supported by a massive cash position and consistent revenue acceleration. The company's latest quarterly results, reported February 2, 2026, showed fourth-quarter 2025 revenue of $1.41 billion (up 70% year-over-year), adjusted EPS of $0.25 (beating estimates), and GAAP net income of $609 million. U.S. commercial revenue surged 137%, highlighting robust enterprise AI demand through platforms like Foundry and Gotham.

Management issued aggressive 2026 guidance: full-year revenue between $7.18 billion and $7.20 billion (implying 61% growth), with U.S. commercial revenue exceeding $3.144 billion. The outlook crushed consensus, underscoring Palantir's momentum in AI-driven data analytics for government and commercial clients. CEO Alex Karp described the company as "an n of 1" in the AI software market, emphasizing its unique position combining high growth with GAAP profitability and a Rule of 40 score of 127%.

Despite the impressive numbers, the stock has struggled in early 2026 amid a broader SaaS and AI sell-off. Analysts point to valuation risks: the trailing P/E exceeds 200x, and the forward P/E remains elevated even after recent weakness. Consensus price targets hover around $191 (implying ~46% upside), with ratings split between Moderate Buy (12 Buy, 5 Hold, 2 Sell in recent months). Recent upgrades include Mizuho to Outperform at $195, Piper Sandler Overweight at $230, and others, but some firms maintain Hold or cautious views citing execution risks and potential slowdowns.

Palantir's relocation of headquarters to Miami, Florida (announced mid-February 2026), added a positive note, with shares briefly rising 4.9% post-announcement to $135.24 on February 20. The move positions the company in a business-friendly state and has fueled speculation about future growth initiatives.

Key drivers include Palantir's expanding AI bootcamps, which accelerate customer onboarding and adoption, and its focus on commercial AI platforms. The company continues to scale operating leverage as AI models advance, with analysts forecasting 62% growth in 2026 and 41% in 2027. However, critics argue that even aggressive projections imply the stock prices in several years of near-perfect execution, leaving little margin for error.

Institutional activity shows mixed signals: some funds have reduced stakes amid the pullback, while others increased positions. Insider buying by executives, including CEO Alex Karp, signals confidence, though governance questions (such as past CEO jet reimbursements) have surfaced in discussions.

Looking ahead, the next earnings report is expected May 4-11, 2026, with consensus EPS estimates around $0.26 for Q1. Investors will watch for updates on commercial momentum, government contracts, and any new AI product launches or partnerships.

Palantir remains a polarizing name: bulls see it as a leader in enterprise AI with durable growth, while bears highlight valuation froth and risks if AI hype cools or competition intensifies from rivals like Snowflake or custom solutions. The stock's recent softness offers a potential entry for believers in its long-term story, but volatility persists in a market grappling with AI spending scrutiny and macroeconomic shifts.