Why Is Palantir Stock Plummeting Today?
Key Points
Job cuts exploded in October according to a report from a private firm.
The report is the latest sign of substantial stress in the economy, causing investors to rotate out of riskier stocks trading at premium prices.
The company's stock has risen more than 221% in the last year alone.
- 10 stocks we like better than Palantir Technologies ›
Shares of Palantir (NASDAQ: PLTR) are sinking on Thursday, down 6.4% as of 1:12 p.m ET. The move comes as the S&P 500 and the Nasdaq Composite lost 1.1% and 1.7%, respectively.
The artificial intelligence (AI) powerhouse is seeing its stock fall amid a larger sell-off as investors weigh macro news and stretched valuations in tech.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
October job cuts hit two-decade high
While the government shutdown means no official job numbers from the Bureau of Labor and Statistics (BLS), according to a report from the firm Challenger, Gray & Christmas, job cuts for October totaled 153,074. That's up 183% from September and is the most cuts for the month of October since 2023.
The news is the latest sign of trouble that is making investors rethink the incredible multiples many tech stocks carry, like Palantir's price-to-earnings ratio (P/E) of more than 600.
Palantir's stock is overpriced
While investors can get carried away waiting for the perfect deal and miss opportunities, the reality is that a great company can be a bad investment. It's hard to look at Palantir's current valuation and see it as anything but stretched -- very, stretched, in fact.
With a P/E of 600, Palantir would have to grow its earnings tenfold just to approach somewhat reasonable levels. Even then, it would trade at a P/E nearly twice that of Alphabet. I would avoid Palantir stock.
Should you invest $1,000 in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $592,390!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,196,494!*
Now, it’s worth noting Stock Advisor’s total average return is 1,052% — a market-crushing outperformance compared to 193% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of November 3, 2025
Johnny Rice 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.
Recommended Articles
