Palantir stock has crashed this year, but there may be upside ahead

Palantir stock has crashed 35% this year and fallen 45% from its 52-week high, despite strong first-quarter revenue of $1.63 billion. Analysts like Wedbush's Dan Ives argue the sell-off is overdone, citing Palantir's central role in AI monetization and rising earnings estimates.

The rocket blasters have fallen off the stock of AI software maker Palantir PLTR https://finance.yahoo.com/quote/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 https://finance.yahoo.com/quote/^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 https://finance.yahoo.com/video/palantir-stock-victim-fictional-narratives-155723925.html 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 https://finance.yahoo.com/quote/SNDK/ and Micron MU https://finance.yahoo.com/quote/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 https://finance.yahoo.com/about/promos/gold/alphaspace?100003557 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. Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance