Palantir Technologies shares drop over 40% since November peak as AI darling faces valuation reality check

Palantir stock down 40% ahead of earnings: AI and software giant stuck in worst-of-both-worlds bind

Palantir sank 40% from November peak; market expects 143% net income growth and double free cash flow in Q2, yet remains S&P 500's most expensive stock by price-to-sales. For IT/CTO buyers, strong cash generation justifies premium, but Wall Street's darkened sentiment means beating estimates may not restore confidence—a cautionary signal on software/AI valuation volatility in 2026.