Palantir (PLTR) Plunges 3.46% Amid AI Bubble Fears

On September 2, 2025, Palantir's stock experienced a 3.46% drop in pre-market trading, reflecting a significant decline in investor sentiment.

Palantir's recent stock performance has been influenced by several factors. Sector rotation and insider selling have contributed to the decline, with CEO Alex Karp selling some of his shares to cover income taxes. Additionally, comments from OpenAI's Sam Altman suggesting an AI bubble may have further spooked investors.

Despite these concerns, Palantir continues to demonstrate strong growth. Its second-quarter earnings report showed a 48% year-over-year increase in revenue and an adjusted operating margin of 46%. The company's Artificial Intelligence Platform (AIP) has driven significant growth in its U.S. commercial revenue, which increased by 93% year over year. The government segment also remains robust, with sales to the U.S. government climbing 53% in the most recent quarter.

Analysts have mixed opinions on Palantir's stock. While some see the pullback as a buying opportunity, others are cautious due to the stock's high valuation. The average rating for PLTR stock is "Hold," with a 12-month price target of $137.16, indicating a potential decrease of 12.48% from current levels. The company's strong earnings growth and positive analyst expectations suggest that Palantir remains a company to watch, despite recent volatility.