Analysis of the Reasons Behind Software Stock Pullback
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 9 hours ago
0mins
Should l Buy PLTR?
Source: NASDAQ.COM
- Market Sentiment Shift: In 2025, Palantir Technologies has seen its stock price drop about 22%, while Adobe, Salesforce, and ServiceNow have all slid between 25% and 30%, indicating increasing investor concerns about software stocks despite strong performance reports from these companies.
- Valuation Risk Emergence: With the S&P 500 climbing 78% from 2023 to 2025, many software stocks have run ahead of their underlying fundamentals, leading to a market reassessment of these high-valuation stocks, which could further depress prices.
- Misunderstanding of AI Impact: While AI is viewed as a potential disruptive force, analysis suggests that its application is actually helping incumbents enhance their competitive advantages rather than simply threatening their market positions, indicating that market fears regarding AI may be misguided.
- Long-Term Growth Potential: Despite Palantir's stock price decline year-to-date, it has risen over 80% since the beginning of 2025, reflecting strong revenue growth and profitability, suggesting market recognition of its long-term growth potential.
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Analyst Views on PLTR
Wall Street analysts forecast PLTR stock price to rise
17 Analyst Rating
5 Buy
10 Hold
2 Sell
Hold
Current: 133.020
Low
50.00
Averages
192.88
High
255.00
Current: 133.020
Low
50.00
Averages
192.88
High
255.00
About PLTR
Palantir Technologies Inc. is engaged in building software to assist in counterterrorism investigations and operations. The Company has built four principal software platforms, including Palantir Gotham (Gotham), Palantir Foundry (Foundry), Palantir Apollo (Apollo), and Palantir Artificial Intelligence Platform (AIP). Apollo is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Gotham enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants. Foundry transforms the ways organizations operate by creating a central operating system for their data. AIP enables responsible artificial intelligence (AI)-advantage across the enterprise by using primary, core components built to effectively activate large language models and other AI within any organization.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant Stock Growth: Palantir's shares have surged 1,200% over the past three years, driven by consistent earnings growth and positive outlook on demand, attracting early investors' interest.
- Valuation Concerns: Despite the impressive stock rise, high valuation has caused some investors to worry, leading to a 25% decline in stock price this year, reflecting market caution regarding future demand.
- Commercial Customer Expansion: Palantir has increased its U.S. commercial customer base from under 20 five years ago to over 500 today, with the latest quarter's U.S. commercial contract value exceeding $1.3 billion, marking a 67% year-over-year increase, showcasing its successful business transformation.
- AI Platform Driving Growth: The launch of Palantir's Artificial Intelligence Platform (AIP) in 2023 provides customers with a fast and cost-effective way to implement AI, further boosting revenue growth and enhancing market competitiveness.
See More
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- Agreement Extension: On February 10, Palantir Technologies Inc. announced the extension of its multi-year agreement with Airbus to further enhance the Skywise civil aviation data platform, which improves aircraft design and efficiency while providing ongoing technological support amid increasing innovation and competitiveness demands in the aerospace sector.
- Performance Surge: Recent reports indicate that Palantir's revenue increased by 70% year-over-year in Q4, with operating income surging approximately 2.1 times, showcasing the company's robust growth momentum, and analysts predict that this growth will persist and accelerate, solidifying its competitive position in the software industry.
- Market Outlook: The Skywise platform not only enhances airline operational performance but also delivers secure, AI-enabled capabilities that improve efficiency across manufacturing, supply chain, maintenance, and flight operations, highlighting its strategic significance in the aviation sector.
- Investment Potential: While Palantir is viewed as a promising investment, analysts suggest that certain AI stocks may offer greater upside potential and lower downside risk, urging investors to carefully assess market dynamics.
See More
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- Competitive Primary: Bores faces a crowded field in the Democratic primary, and given the district's demographics, the winner of this primary is likely to secure the general election, making AI regulation a pivotal issue for voters.
- Bipartisan Backing: The Jobs and Democracy PAC is part of a larger bipartisan initiative led by former lawmakers Brad Carson and Chris Stewart to support candidates advocating for increased AI regulation, recently bolstered by a $20 million donation from Anthropic.
- Regulatory Debate Intensifies: Congressional discussions on AI regulation are centered around whether to temporarily ban states from implementing certain AI laws to prevent a patchwork of regulations, with proponents arguing it could slow AI development, although the proposal has failed to gain bipartisan support.
See More
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- Ad Campaign Support: The pro-regulation Jobs and Democracy PAC is launching a six-figure ad buy in support of candidate Alex Bores, a key proponent of New York's new AI law, highlighting the AI industry's keen interest in shaping policy direction.
- Competitive Primary Race: Bores faces a crowded field in the Democratic primary, where the winner is likely to secure the general election due to the district's demographics, making AI regulation a pivotal issue in the campaign.
- Funding from Industry Giants: The ad buy by Jobs and Democracy PAC is part of a larger bipartisan effort led by former lawmakers Brad Carson and Chris Stewart to support candidates who favor increased AI regulation, showcasing the significant influence of the industry on policy.
- Legislative Context for AI Regulation: The RAISE Act, championed by Bores, mandates large AI developers to publish safety protocols and report serious misuse of their technology, reflecting growing concerns over AI safety and sparking widespread debate on regulatory policies.
See More
Investors Focus on Fed Minutes and Walmart Earnings
- Fed Minutes Analysis: The January FOMC minutes indicate broad support among policymakers for pausing rate cuts despite ongoing inflation risks, which could influence future monetary policy directions and affect market sentiment and investment decisions.
- Walmart Earnings Preview: Walmart is set to report earnings before the bell today, with investors keenly awaiting insights from the new CEO regarding consumer health and demand, which will directly impact retail sector performance and investor confidence.
- Meta Smartwatch Plans Revived: Reports suggest that Meta has revived its smartwatch plans targeting a launch this year, a strategic shift that could enhance its competitiveness in the wearables market and provide new revenue streams for the company.
- Economic Data and Market Reaction: Key economic indicators such as Initial Jobless Claims and the Philly Fed Business Index are scheduled for release today, with investors closely monitoring their impact on the market, especially amid heightened uncertainty regarding Fed policies.
See More
Palantir CEO Flight Costs Surge 123% to $17.2 Million
- Controversial Reimbursement: Palantir reimbursed CEO Karp $17.2 million for his 'executive aircraft' in 2025, representing a staggering 123% increase from $7.7 million in 2024, raising significant governance concerns.
- Flight Time Implications: Analysts suggest that this level of spending implies Karp could be spending 2,457 flight hours in the air, equating to 28% of the year, or 1,147 hours if using a high-end G650 jet, which is about 13% of the year.
- Internal Control Issues: While Palantir employs its own 'Gotham' and 'Foundry' software to enhance efficiency, critics argue that the CEO's travel budget indicates a lack of similar discipline internally, potentially harming the company's reputation and investor confidence.
- Stock Price Warning: Investor Burry warns that Palantir's stock could face a 55.68% decline, predicting a 'landing area' between $50 and $60, while the current trading price is around $135.38, which could negatively impact market sentiment.
See More
Palantir Technologies Stock Soars Amid AI Boom
- Significant Stock Growth: Palantir's shares have surged 1,200% over the past three years, driven by consistent earnings growth and positive outlook on demand, attracting early investors' interest.
- Valuation Concerns: Despite the impressive stock rise, high valuation has caused some investors to worry, leading to a 25% decline in stock price this year, reflecting market caution regarding future demand.
- Commercial Customer Expansion: Palantir has increased its U.S. commercial customer base from under 20 five years ago to over 500 today, with the latest quarter's U.S. commercial contract value exceeding $1.3 billion, marking a 67% year-over-year increase, showcasing its successful business transformation.
- AI Platform Driving Growth: The launch of Palantir's Artificial Intelligence Platform (AIP) in 2023 provides customers with a fast and cost-effective way to implement AI, further boosting revenue growth and enhancing market competitiveness.
See More
Palantir Extends Multi-Year Agreement with Airbus to Enhance Skywise
- Agreement Extension: On February 10, Palantir Technologies Inc. announced the extension of its multi-year agreement with Airbus to further enhance the Skywise civil aviation data platform, which improves aircraft design and efficiency while providing ongoing technological support amid increasing innovation and competitiveness demands in the aerospace sector.
- Performance Surge: Recent reports indicate that Palantir's revenue increased by 70% year-over-year in Q4, with operating income surging approximately 2.1 times, showcasing the company's robust growth momentum, and analysts predict that this growth will persist and accelerate, solidifying its competitive position in the software industry.
- Market Outlook: The Skywise platform not only enhances airline operational performance but also delivers secure, AI-enabled capabilities that improve efficiency across manufacturing, supply chain, maintenance, and flight operations, highlighting its strategic significance in the aviation sector.
- Investment Potential: While Palantir is viewed as a promising investment, analysts suggest that certain AI stocks may offer greater upside potential and lower downside risk, urging investors to carefully assess market dynamics.
See More
AI Regulation Showdown in New York Congressional Race
- Ad Campaign Support: The Jobs and Democracy PAC, aligned with the Democratic Party, is launching a six-figure ad campaign to support Alex Bores in New York's 12th congressional district, where Bores is a key proponent of the RAISE Act, which mandates large AI developers to publish safety protocols and report serious misuse of their technologies.
- Competitive Primary: Bores faces a crowded field in the Democratic primary, and given the district's demographics, the winner of this primary is likely to secure the general election, making AI regulation a pivotal issue for voters.
- Bipartisan Backing: The Jobs and Democracy PAC is part of a larger bipartisan initiative led by former lawmakers Brad Carson and Chris Stewart to support candidates advocating for increased AI regulation, recently bolstered by a $20 million donation from Anthropic.
- Regulatory Debate Intensifies: Congressional discussions on AI regulation are centered around whether to temporarily ban states from implementing certain AI laws to prevent a patchwork of regulations, with proponents arguing it could slow AI development, although the proposal has failed to gain bipartisan support.
See More
Pro-Regulation AI PAC Launches Ad Campaign in NY Primary
- Ad Campaign Support: The pro-regulation Jobs and Democracy PAC is launching a six-figure ad buy in support of candidate Alex Bores, a key proponent of New York's new AI law, highlighting the AI industry's keen interest in shaping policy direction.
- Competitive Primary Race: Bores faces a crowded field in the Democratic primary, where the winner is likely to secure the general election due to the district's demographics, making AI regulation a pivotal issue in the campaign.
- Funding from Industry Giants: The ad buy by Jobs and Democracy PAC is part of a larger bipartisan effort led by former lawmakers Brad Carson and Chris Stewart to support candidates who favor increased AI regulation, showcasing the significant influence of the industry on policy.
- Legislative Context for AI Regulation: The RAISE Act, championed by Bores, mandates large AI developers to publish safety protocols and report serious misuse of their technology, reflecting growing concerns over AI safety and sparking widespread debate on regulatory policies.
See More
Investors Focus on Fed Minutes and Walmart Earnings
- Fed Minutes Analysis: The January FOMC minutes indicate broad support among policymakers for pausing rate cuts despite ongoing inflation risks, which could influence future monetary policy directions and affect market sentiment and investment decisions.
- Walmart Earnings Preview: Walmart is set to report earnings before the bell today, with investors keenly awaiting insights from the new CEO regarding consumer health and demand, which will directly impact retail sector performance and investor confidence.
- Meta Smartwatch Plans Revived: Reports suggest that Meta has revived its smartwatch plans targeting a launch this year, a strategic shift that could enhance its competitiveness in the wearables market and provide new revenue streams for the company.
- Economic Data and Market Reaction: Key economic indicators such as Initial Jobless Claims and the Philly Fed Business Index are scheduled for release today, with investors closely monitoring their impact on the market, especially amid heightened uncertainty regarding Fed policies.
See More
Palantir CEO Flight Costs Surge 123% to $17.2 Million
- Controversial Reimbursement: Palantir reimbursed CEO Karp $17.2 million for his 'executive aircraft' in 2025, representing a staggering 123% increase from $7.7 million in 2024, raising significant governance concerns.
- Flight Time Implications: Analysts suggest that this level of spending implies Karp could be spending 2,457 flight hours in the air, equating to 28% of the year, or 1,147 hours if using a high-end G650 jet, which is about 13% of the year.
- Internal Control Issues: While Palantir employs its own 'Gotham' and 'Foundry' software to enhance efficiency, critics argue that the CEO's travel budget indicates a lack of similar discipline internally, potentially harming the company's reputation and investor confidence.
- Stock Price Warning: Investor Burry warns that Palantir's stock could face a 55.68% decline, predicting a 'landing area' between $50 and $60, while the current trading price is around $135.38, which could negatively impact market sentiment.
See More
