Palantir Bears Sell the Headlines—Time for Bulls to Buy?

Key Points

• Palantir stock continues to drop and may “round trip” its 2025 gains.
• The sell-off continues even as Palantir announces new contracts.
• After seeing the stock grow more than 200% in the last 12 months, many retail investors are sitting out the sell-off.

Palantir Technologies Inc. NASDAQ: PLTR continues to sell off. On March 6, PLTR stock fell over 10% on nearly double the daily volume, bringing its 30-day decline to over 27%. A drop exceeding 20% places the polarizing stock in a bear market.

If the stock were to drop another 5% or so, it would “round trip” its gains in 2025. That happens when the stock price climbs but then falls back to its prior level. Investors never like to see that, but it hasn’t been unusual to see some of the leading technology stocks trade lower in 2025.

Alphabet Inc. NASDAQ: GOOGL has given up all the gains it’s made since it began to rally in late November. Apple Inc. NASDAQ: AAPL is down nearly 6% (5.86%) in 2025. And even NVIDIA Corp. NASDAQ: NVDA is down more than 12% this year.

Despite the drop, Palantir is still trading at a forward price-to-earnings (P/E) ratio of 290.74 and a price-to-sales of 73.77. That continues to be expensive by any measure. That excessive valuation is why PLTR stock may have to drop further, particularly since the company won’t report earnings until the beginning of May.

But it’s not like the company has delivered bad news. In fact, it’s been quite the opposite. Now that bears have sold the headlines, investors who aren’t involved with Palantir will want to see if the bears jump in to buy the actual news.

Palantir Had a Good Week

The irony of the selling pressure on Palantir stock is that the company has had a good week. Between March 4 and 6, it announced three new deals.

• March 4 – Palantir announced the successful deployment of its specialized technological solutions for international retail banking activities within the European bank, Societe Generale.

• March 5 – Palantir announced a joint venture with TWG Global in which the two companies will redefine AI deployment in banking, investment management, insurance, and other financial services.

• March 6 – Palantir Technologies Spain, SLU, announced a three-year strategic partnership with EYSA, a leader in comprehensive sustainable mobility solutions. EYSA is looking to integrate Palantir’s software to accelerate the development of mobility applications and use cases.

That's a lot of winning, and all the contracts were on the company’s commercial side. It also continues to show what Palantir chief executive officer Alex Karp has maintained: Large language models (LLMs) are becoming a commodity. However, both governments and corporations realize they need an operating system to make LLMs provide meaningful data. Palantir will almost always be on the short list of companies they consider.

Two of the contracts are also in Europe. This could be significant because it gives Palantir a foot in the door to European governments at a time when many nations are at least lip service to increasing defense spending.

But that didn’t stop institutional investors from selling the stock. The argument is that Palantir needs approximately 40 new contracts every quarter to justify its valuation. So, while three contracts are nice, the skeptics will say it’s insufficient. Short interest is down over the last 30 days, but the dollar volume being sold short is up about 250% year-over-year.

Many Retail Investors Are Choosing to Sit This One Out

Many investors have been anticipating a reality check for PLTR stock. However, most dedicated Palantir bulls remain unfazed by recent movements. Rather than engaging with bearish sentiment, many are opting to stay on the sidelines.

With the stock still trading above $80, there’s little reason for concern. Many retail investors continue to hold gains of 400% or more. While the surge above $120 per share was rewarding, even the most optimistic shareholders expected a pullback. Those unprepared for volatility likely exited long before now.

Things won’t start getting serious for these investors unless the stock drops into the $40s. But by that time, institutional investors will be flooding into the stock at its newly “cheap” price.