The rocket blasters have fallen off the stock of AI software maker Palantir (PLTR). **Quick insight: **From a stock perspective, it has been a terrible year for former highflier Palantir. The company's shares have plunged 35%, versus an 8.7% gain for the S&P 500 (^GSPC), and tanked 45% from their 52-week high.
The sell-off can't be blamed on Palantir's fundamentals.
Palantir delivered a blockbuster first quarter, generating $1.63 billion in revenue. It marked a 85% year-over-year increase, driven heavily by a 104% surge in its US business.
"I think that Palantir has been a victim of the SaaS apocalypse a little, which I think is basically a fictional narrative," Wedbush tech analyst and Palantir bull Dan Ives said on Yahoo Finance's Opening Bid (video above).
The why: Following a massive AI rally that peaked late last year and lifted Palantir to new heights, investors decided to lock in profits. The company's hefty valuation leaves absolutely no room for operational missteps. Investors have instead rotated into AI memory chip names like Sandisk (SNDK) and Micron (MU), making these two tech names standouts in 2026.
Sentiment has been further dampened by notable insider selling at Palantir and rising anxieties over slower international commercial expansion. All recent insider activity on Palantir has been sales, according to Yahoo Finance AlphaSpace data.
Despite the sell-off, Palantir still has its legions of fans on Wall Street. The past five analyst actions have all been Buy reiterations, per Yahoo Finance AlphaSpace. Earnings estimates for Palantir for 2026 and 2027 have continued to trend higher from 90 days ago
Bottom line: "Palantir is going to be at the epicenter of the AI revolution of monetization. I think this is probably one of the most dislocated tech stocks [around]," Ives said.
The price action in Palantir may not reflect Ives' upbeat views, but the fundamentals do support a more upbeat outlook on the stock than perhaps the market has assigned to it.
Brian Sozzi* is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X** @BrianSozzi**,** Instagram**, and** LinkedIn**. Tips on stories? Email brian.sozzi@yahoofinance.com.*
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