Palantir bounces, but damage has been done

Retail fave Palantir bounced on Tuesday after suffering a 10% tumble in Monday’s bloodletting. It was the data analytics and AI software company’s second 10% drop in three sessions.

Palantir has been one of a number so-called Trump trades — including Tesla and bitcoin — that seemed to be trying to find their footing on Tuesday after a weekslong market sell-off that went into overdrive on Monday. (The S&P 500’s 2.7% drop yesterday was the market’s worst day of the year.)

The steep sell-off in Palantir shares has been deeply painful for investors. Since the stock peaked at an all-time high of more than $124 a share on February 18, it’s plunged by almost 40%. The plunge has vaporized more than $100 billion in market cap from Palantir, leaving recent investors deeply underwater.

The slump has also deeply damaged the technical momentum the stocks have maintained for much of the last year, with Palantir crashing below its 50-day moving index. (Don’t forget in 2024, Palantir was the best-performing stock in the S&P 500, with a 340% gain.)

Despite the pain, tech bulls continue to argue that holding on to companies like Palantir is the right move despite the downdraft for large-cap tech shares.

Palantir bull Dan Ives wrote this after yesterday’s market rout.

“We clearly have misjudged the market reaction to the Trump Policy Bazooka to hit the markets this year. Our bullish calls on Tesla, Nvidia, and many of the Mag 7 have been upside down this year... but our stock calls are not for the next few months... it’s for where we see these tech names over the next 1, 3, and 5 years. Despite much criticism, that is how we have always called our tech winners and many times over the years with Tesla, Apple, Google, Nvidia, Amazon, Palantir among others our backs were against the wall and the times appeared dark at that moment... but yet those were the golden opportunities and that is our view today.”