Palantir shares plunged more than 9% on Tuesday, extending the company’s losing streak to five consecutive trading days. The decline comes amid a broader slide in AI stocks, with industry leaders like NVIDIA and Meta also experiencing significant drops in their stock values. The downturn has erased much of Palantir’s strong gains from earlier in the month, following its latest earnings report where it topped Wall Street estimates and raised its full-year guidance.
Since August 13, the company’s total decline has reached 15.5%. Palantir’s stock slump has been partly attributed to a critical report from Citron Research, which alleges the company’s stock is overvalued. The report suggests that if OpenAI’s $500 billion valuation metrics were applied to Palantir, the company’s shares would trade at $40, significantly lower than its current trading price.
NVIDIA shares also took a hit, slipping by as much as 3% before market close, while Meta’s stock fell nearly 2% to $753.43 per share on Tuesday afternoon. This adds to a 3% drop in Meta’s share price on Monday. Overall, the Nasdaq experienced a 1.4% decline in midday trading.
Palantir’s stock faces broad decline
The decline in AI stocks isn’t an isolated event. Cryptocurrency stocks also tumbled on Tuesday, with Coinbase shares falling nearly 5%, Robinhood dropping more than 5%, and Bitcoin sliding 2.4%.
Despite the recent downturn, Palantir reported robust earnings, with quarterly revenue surpassing the $1 billion mark for the first time. CEO of OpenAI, Sam Altman, commented on the state of the AI sector last week, saying, “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” adding, “Is AI the most important thing to happen in a very long time?
My opinion is also yes.”
Despite recent struggles, 2025 has been a highly successful year for Palantir’s stock, which has surged 110% since the beginning of the year, starting at $75.19. The rise has been fueled by the company’s advancements in AI tools, which were pivotal in securing a $10 billion deal with the Army to consolidate 75 contracts. Palantir’s outlook remains optimistic; the company boosted its full-year revenue guidance, expecting earnings between $4.14 billion and $4.15 billion, up from its previous estimates of $3.89 billion to $3.90 billion.
The company’s success aligns with the U.S. government’s push for greater AI and chip infrastructure, involving financial commitments from companies like NVIDIA and OpenAI. While Palantir and other AI stocks face short-term challenges, the sector’s long-term prospects remain strong, driven by continued technological advancements and strategic government support.
