Palantir fans: You’re not going to like what just happened

A quiet break in the trend is testing how much conviction investors still have in one of the market’s loudest AI stories.

Palantir acted like gravity didn't matter for much of 2025. After a great third quarter, the stock shot up beyond $200 thanks to strong demand for AI, government contracts, and a long-term retail fan base.

But something changed in the past few sessions. The shares fell below the 50-day moving average for the first time during this AI leg of the rise, and are now very near the 100-day line.

For a stock beating every benchmark put in front of it so far this year, it was the first major technical breakdown in a long time.

A line gives away Palantir stock's technical breakdown

Technical breakdowns aren't a big deal until they are. The 50-day moving average isn't magic, but for stocks with momentum like Palantir, it frequently serves like a pressure valve: a point where buyers move in, shorts step aside, and the uptrend stabilizes.

The issue then becomes whether the support is only a short break or a bigger change in mood.

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Palantir is currently near the 100-day moving average, which traders view as a "truth test." If you hold it, the stock may reset without losing its long-term nature. If you lose it, the next genuine support is much lower.

The arrangement is important, since Palantir isn't falling apart because of negative news. It's falling apart after one of the company's best quarters.

Palantir fundamentals are screaming; the chart is whispering

Palantir's third quarter was the type of growth that most software businesses dream of.

For Q3 2025, Palantir reported:

• Revenue of about $1.18 billion, up 63% year over year and 18% sequentially
• U.S. commercial revenue up 121% year over year, making the company’s AI Platform the main growth engine
• A Rule of 40 score of 114%, an unusually high combination of growth and margins for enterprise software

This is the time when the stock should be going up a lot on paper. The market is doing something strange, though: it's beginning to push back a bit.

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The story isn't that the profits were bad. It's that expectations, value, and technicals are all becoming tighter at the same time.

Palantir trades at a premium that is unusual for a large-cap software company, even after delivering strong performance. It's easy to deal with when the momentum is strong, but it's tougher to explain when a trend line that used to be dependable suddenly breaks.

Wall Street keeps lifting Palantir targets, but carefully

The way analysts act in this scenario is also strange. After the earnings beat, companies including Citi, Mizuho, Northland, UBS, and DA Davidson all boosted their price targets in the first part of November.

Bank of America is still the most vociferous bull, saying that Palantir should be worth more because of its AI platform and long-term revenue growth.

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But even with all those increases, the average rating is still hold. The average price estimate for the next 12 months is just a little higher than where the stock is presently.

In other words, the Street knows that the company is doing well, but it doesn't want to pursue the stock much higher. This makes the technical break more noteworthy, since it occurs at the same time analysts are more positive about the statistics, but still wary of the value.

A valuation stress test in real time

There is a basic tension behind all of this: Can Palantir grow into the price that investors have already set for it?

The stock is still trading at some of the highest multiples in large-cap tech, even after the recent drop. It's evident that the company is growing, but so is the scrutiny.

When a high-multiple name falls below the 50-day average, it necessitates a reevaluation: Are investors paying for growth that is coming, or growth that has already been fully priced in?

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This is why the line for 100 days is important. If Palantir stays around it, the stock may "cool" as the firm continues growing.

If it doesn't, the talk moves on to lower support levels and if the AI trade has become too hot in the short term.

Here's a short, punchy version of the setup:

• Below the 50-day: momentum interrupted
• Testing the 100-day: buyer conviction on trial
• Street targets rising: but cautiously

It doesn't imply that the AI narrative is flawed. It suggests that the price action is now catching up to the argument over value.

The line nobody expected Palantir to test

Long-term holders should know that nothing has changed in the business narrative. Palantir is doing a great job, growing swiftly, and delivering numbers that back up a lot of the excitement. If you're in it for the multi-year AI thesis, the current technical problems are more noise than story.

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But for traders and anybody else who is thinking about time, the setup is more binary.

Short-term takeaways:

• Momentum is no longer automatic.
• Support levels matter again.
• Pullbacks may not be instantly bought.

This isn't the Palantir of early 2023, when any drop brought in a lot of retail purchasers. This stock is bigger and more popular, and it trades on all three factors: fundamentals, technical indicators, and value. That's a more grown-up and difficult stage.

The rise might get back on track if the stock stays above the 100-day moving average. If it goes down smoothly beyond that level, the market may be saying that even strong profits and AI momentum aren't enough to keep the high prices going without a break.

The question every Palantir holder should ask now

Palantir is still one of the most evident growth stories in AI. But the chart eventually offered its first big warning flag.

It will depend on how PLTR acts around the 100-day moving average and if investors are still prepared to pay a lot for a stock that continues producing, but at a price that requires perfection.

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