Palantir Technologies (NASDAQ:PLTR), a data analytics software specialist, closed Wednesday at $139.54, down 11.62%. The stock moved lower as valuation concerns resurfaced despite strong Q4 results and analyst upgrades.
Trading volume reached 110.7 million shares, coming in about 136% above its three-month average of 47 million shares. Palantir Technologies IPO'd in 2020 and has grown 1369% since going public.
How the markets moved today
The broader market weakened Wednesday, with the S&P 500 (SNPINDEX: ^GSPC) slipping 0.51% to 6,882, while the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell 1.51% to 22,905. Within software infrastructure names, peers were mixed, as Snowflake (NYSE:SNOW) closed at $165.29 (-4.59%) while Prologis (NYSE:PLD) finished at $134.84 (+2.24%).
What this means for investors
Palantir shares declined sharply on Wednesday, despite 70% revenue growth to $1.41 billion and two analyst upgrades to Buy. The drop reflected concerns about valuation, as investors questioned the stock's premium compared to other AI software companies and reconsidered how much future growth is already priced in.
The company reported strong Q4 momentum in both government and commercial segments, supported by a $1 billion UK Ministry of Defence contract that ensures multi-year revenue visibility. Two firms raised their targets, citing accelerating U.S. commercial adoption and sustained AI demand. However, these upgrades did not prevent an 11% decline, as a critical hedge fund letter and ongoing valuation concerns led investors to rotate out of the stock. Investors will now assess whether continued commercial momentum and expanding margins can justify Palantir’s valuation, which remains significantly higher than most enterprise software peers.
Should you buy stock in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $431,111!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,521!*
Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 4, 2026.
Eric Trie has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies, Prologis, and Snowflake. The Motley Fool has a disclosure policy.
