The stock price of Palantir Technologies Inc., which opened at $155.74 USD on Wednesday on the NASDAQ, crashed over 10% in the day's trade, going as low as 141.48 at one point.
Wednesday's fall is one of the sharpest the company has witnessed in recent times, which effectively wiped off $40 billion from the company's market cap. The sharp fall came despite a positive Quarter 4 earnings report presented by the company earlier this week where it beat estimates with 56% revenue growth.
Notably, Palantir is not the only tech company that saw a sharp fall in stock prices on Wednesday. Many other tech stocks, such as, Advanced Micro Devices, Applovin Corp, Western Digital and Micron Technology Inc, also registered between 9% to 10% fall in stock prices.
Why Did Palantir Stock Price Crash?
The stock price of Palantir crashed over 10% on Wednesday despite a strong Q4 earnings report due to a number of factors. The first is the broader software sector stock sell-off that the US stock markets are currently witnessing.
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{{/usCountry}}The second, most likely, concerns some sell-off after momentary profit-making following the post-earnings report rally in stock prices noted earlier. Notably, the stock jumped 6.9% in early trading on Tuesday.
Additionally, there is also concern raised by many experts that the stock price of Palantir is overvalued. Many analysts and valuation models say the stock trades at very high multiples. Additionally, the stock has given nearly 300% run up in the last three years, which has resulted in more Hold or Sell calls on Wall Street as opposed to strong Buys.
Palantir is a data analytics and AI software company that helps governments and businesses make decisions from complex, large-scale data.