Why Palantir Stock Plunged 34% in the First Half of 2026 and Why the Worst Might Be Over

Palantir Technologies’ shares fell 34% during the first half of 2026, according to S&P Global Market Intelligence, contrasting with the S&P 500’s 10% gain over the same period. The selloff came as investors became more selective about artificial intelligence stocks after a year of cooling interest in richly valued “next big thing” narratives. The article argues that Palantir’s strong results and a lower share price have brought valuation back toward more reasonable levels. In early February, Palantir reported Q4 revenue of $1.4 billion, up 70% year over year and 19% quarter over quarter, alongside adjusted EPS of $0.25. U.S. government revenue rose to $570 million, while U.S. commercial revenue reached $507 million, up 137%. In May, first-quarter revenue jumped to $1.63 billion, with adjusted EPS up 154% to $0.33, and RPO climbing 134%. The company’s net dollar retention was 150% in Q1.