For the third time in 5 years, this cult favourite is organising for a 50%-60% wipeout.
The warning indicators are flashing purple. Technical breakdown? Verify. Sentiment unwinding from euphoric ranges? Verify. Valuation stretched past actuality? Double test.
Palantir Applied sciences (PLTR) is within the early levels of a collapse that would strip greater than 60% of its worth from November 2025 highs. And should you assume that sounds excessive, you haven’t been being attentive to this inventory’s historical past.
- 2021: Down 80% from highs.
- 2022: One other 60% decline from restoration peaks.
- 2026: Right here we go once more.
For what it’s price, I’m a long-term bull on Palantir’s mission and market place. However ignoring the warning indicators right here can be reckless.
The mix of bearish technical alerts, sentiment rotation, and an overextended valuation places the inventory at instant threat for a full retracement to $100 – and even $75.
The Most Harmful Setup: When Everybody’s Bullish
Probably the most harmful part of Palantir’s setup isn’t the chart. It’s the sentiment.
Palantir spent most of 2024 and 2025 evolving right into a retail investor cult favourite. Excessive-conviction “purchase the dip” merchants grew to become the norm. Their religion was rooted in robust fundamentals and CEO Alex Karp’s defiant angle towards Wall Avenue skeptics.
Karp treats earnings calls like philosophical monologues. He taunts bearish analysts on CNBC. That depth energized Palantir’s base and created an “us in opposition to them” mentality that retail traders cherished.
However right here’s the issue: When everybody’s bullish, there’s no one left to purchase.
Wall Avenue analysts by no means absolutely embraced Palantir as a core AI inventory. Satirically, that outsider standing made PLTR much more enticing to contrarian merchants. The “purchase the dip” technique labored repeatedly for almost two years. It skilled the group to purchase weak spot and get rewarded.
That dynamic ended with the latest earnings report.
Immediately, the group’s perception in limitless upside met a dose of valuation actuality. EPS beat percentages shrank. Ahead steerage got here in much less aggressively bullish. Add macro-level AI exhaustion and a shift towards worth rotation, and also you get a violent reversal.
Euphoric shares don’t right slowly. They collapse.
The Technical Breakdown Confirms the Sentiment Shift
From a buying and selling standpoint, the purple flags began waving on January 8, 2026, when Palantir’s 50-day transferring common shifted right into a declining sample. That’s the road within the sand – a falling 50-day MA alerts a verified bearish pattern.
The injury deepened as shares broke beneath each the 50- and 200-day transferring averages, accelerating draw back momentum. The final time Palantir sustained this sample was 2022, when the inventory misplaced greater than 80% of its worth.
The $125 degree now stands as important help. If this breaks, the chart targets $100, adopted by psychological help at $75. These aren’t speculative targets – they’re traditionally legitimate zones the place Palantir has discovered consumers earlier than.
Priced for Perfection in an Imperfect Market
Palantir’s fundamentals haven’t collapsed, however they not justify the intense valuation.
As of February 2026, Palantir trades at a ahead P/E of 108 – making it probably the most costly names in all the market. For context, the remainder of the Magnificent Seven common a ahead P/E round 29.
That valuation hole is now beneath scrutiny as non-government income progress reveals indicators of slowing. Add potential authorities contract headwinds if finances negotiations goal federal spending, and you’ve got a recipe for a number of compression.
The long-term thesis stays intact. However short-term fundamentals don’t help present costs, particularly in a market rotating away from hypergrowth multiples.
YOUR ACTION PLAN
Traders have to cease pondering like bagholders and begin pondering like merchants.
Lengthy-Time period Traders: Take income now. Re-entering at $100 or $75 isn’t giving up – it’s enjoying the historic rhythm of this inventory. These are high-conviction purchase zones.
Hedging/Inverse Play: The Direxion Day by day PLTR Bear 1X Shares (PLTD) supplies clear publicity to Palantir’s decline with out managing choices complexity.
Aggressive Merchants: Contemplate June 18, 2026, $125 places, at the moment priced at $1,465 per contract. Barely out of the cash with ample time for the pattern to develop. Exit earlier than subsequent earnings (projected Might 11) to keep away from constructive shock threat.
Don’t Get Caught Holding the Bag
Palantir’s path from $125 to $100 – and even $75 – isn’t hypothetical. It’s historic.
It occurred in 2021. It occurred in 2022. And it’s setting as much as occur once more in 2026.
The distinction this time? Retail traders have extra to lose. The cult following is larger. The conviction is deeper.
Which makes the autumn doubtlessly extra devastating.
Historical past doesn’t repeat, nevertheless it rhymes. And proper now, Palantir is rhyming with its personal previous collapses.
The good cash isn’t panicking. It’s positioning.
I talked about this in larger element with Bryan Bottarelli throughout our MTA Reside broadcast on Wednesday. In the event you missed it, you’ll be able to test it out right here.
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FUN FACT FRIDAY
Palantir is called after the “palantíri” – the all-seeing crystal balls from J.R.R. Tolkien’s Lord of the Rings. These had been mystical stones that allowed customers to see throughout huge distances and talk with one another. Fairly becoming identify for an information analytics and surveillance firm that helps governments and firms “see all the pieces” of their information.