Palantir (PLTR) stock fell about 7% on Friday, wiping out roughly $34 billion in market value. The drop came just days after the stock set record highs.
The key level now is $188.15. A close below it would leave Palantir more than 10% under its Oct. 9 record close, which confirms a correction.
The breakout did not last long. Palantir closed above its November 2025 high near $208 last Friday and touched nearly $213 on Monday. That was a short party.
By Wednesday, the stock was back below that old ceiling. An early move above $203 on Friday also faded.
Yahoo Finance called it a bull trap. That is a breakout above resistance that reverses and leaves buyers holding losses.
Software stocks drop together
Palantir was not alone. In a basket of 45 software stocks, 43 were falling and 15 were down at least 5%.
Combined losses topped $260 billion, including about $83 billion at Microsoft (MSFT). The iShares software ETF (IGV) lost nearly 5%, putting its worst day since April in play.
ServiceNow (NOW) swung from a gain of nearly 4% to a loss of over 5% at one point. Salesforce (CRM) gave up a 2% gain and traded about 3% lower.
Twilio (TWLO) fell by double digits and was heading for its worst day since August 2025. That is a rough finish to a week that started well.
Software had been warming up. On Monday, BofA (BAC) double-upgraded Salesforce to Buy from Underperform, saying AI fears were overdone.
Cybersecurity stocks took a hit too. The cybersecurity ETF CIBR is down about 10% this week and is on track for its worst week since March 2020.
Palo Alto Networks (PANW) and CrowdStrike (CRWD) are each down roughly 18% for the week. Reports that OpenAI is in talks to buy Trail of Bits revived competition worries.
Valuation in focus
TipRanks said big institutions may be locking in gains. The stock trades near 170 times earnings, even after a price target increase from Mizuho (MFG).
Yahoo Finance noted the market value is still about 55 times the annual revenue Palantir projected in August. In that report, the company posted 93% second quarter revenue growth and held $9.2 billion in cash and short-term Treasurys.
On the chart, $160 stands out as a major support area, about 14% below the current price. Bulls need to reclaim the $210 area and make it stick.
Palantir reports third quarter earnings on November 2. The stock is up about 13% year to date, with a market value near $483 billion.
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