Prediction: Palantir Stock Will Hit a New Low After Aug. 3

After multiple years of strong gains, Palantir Technologies (NASDAQ: PLTR) stock has begun to decline in 2026. Thus far, it's down around 28%. The tech company has been posting strong results driven by heightened demand from opportunities stemming from artificial intelligence (AI). Its growth rate has been impressive, and CEO Alex Karp hasn't been shy when talking up the company's future growth prospects.

However, even another round of strong quarterly results may not be enough to lift the stock out of its current tailspin. Instead, here's why I think it'll hit a new 52-week low after the company posts its latest numbers next week, on Aug. 3.

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Palantir's valuation has centered on hype, which seems to be fading

At the beginning of the year, Palantir's stock traded at well over 250 times its trailing earnings. Investors didn't care about the valuation because it was doing so well; it was thriving due to AI demand, and expectations were that the growth would remain relentless. That excitement can enable a stock to trade far above what its earnings would typically justify.

The challenge, however, is that these days, there are newer, shinier growth stocks for investors to rally around, such as Elon Musk's Space Exploration Technologies Corp, also known as SpaceX, which went public last month. The shortage of memory and storage products is also leading more growth investors to focus on tech stocks in those areas.

Palantir, despite its impressive growth and all the superlatives its CEO throws out, may simply not be as popular, exciting, or relevant to retail investors as it has been in recent years. And that may hurt the stock more than anything.

Unless Palantir completely smashes expectations, I expect the stock will trade lower

Palantir has typically beaten and raised expectations. But when its valuation is as high as it is, that effectively means beat-and-raise quarters are priced in. And if the raise is not significant, the stock may still fall afterward, as happened when Palantir reported earnings in May. Despite generating 85% revenue growth and raising its guidance, the performance wasn't enough to send its shares rallying.

Currently, Palantir's 52-week low is $106.37, and I believe it will hit that level in the days and weeks following its upcoming earnings report. Heading into the quarter, the bar is set high, and anything short of 85% revenue growth and a strong increase to the guidance is likely to send it reeling.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.