- Palantir stock registered a 135% gain in 2025 but profit taking is taking its toll in early 2026
- The company reported impressive earnings results on February 2 but high valuation has investors cautious
- Citigroup raised its Palantir stock price target to $260 on February 3, following the earnings call
Palantir Technologies (NASDAQ: PLTR) had a great 2025, with its stock price jumping over 130%. But 2026 started rough. Even though its Q4 results, released on February 2, beat what analysts expected, the stock has dropped about 25% since January 1. This drop comes after it hit an all-time high of $207.18 in November 2025.
The Valuation Reckoning
The stock dip seems to come from disappointment after the earnings report and a general market move away from fast-growing tech stocks. Plus, Palantir’s stock is expensive. Even after the recent drop, it’s one of the priciest software companies.
Some investors are wondering if Palantir can really hit its ambitious $7.19 billion revenue goal for 2026 (a 61% increase). They think it might be too optimistic, as AI adoption slows down. Palantir’s Q4 numbers were good. Revenue was up 70% year-over-year, at $1.41 billion. U.S. commercial revenue jumped 137%. But the market didn’t react well. If growth slows down or competition gets tougher, the stock could fall further.
What Palantir Needs to Turn Around
For Palantir to bounce back, it has to prove that its AI revenue can grow past just government contracts and that U.S. commercial growth can continue. Citigroup upgraded the stock to Buy on February 3, with a target price of $260, based on this.
Palantir needs to show that its Artificial Intelligence Platform (AIP) can keep its 100%+ U.S. commercial growth going, even as the initial AI hype dies down. Investors should monitor how well the AIP Bootcamps are doing. If Palantir can turn these trials into big contracts, it could break through the $155 resistance level.
Palantir Stock Price Forecast
Palantir stock RSI reading at 34 supports the bears. The stock will likely struggle for upside momentum if resistance persists at the psychological $140. With the sellers in charge, initial support is likely to be at $135.68. A break below that could send it lower to test $130. On the upside, the first resistance is at the 10-day EMA at $143.90, with the second barrier at $150.25.
Palantir stock with key levels of resistance and support on the daily chart on February 12. Created on TradingView
Investors are looking at the overall value. Palantir’s strong growth was already factored into the stock price. The current drop reflects a wider market shift away from high-priced AI stocks.
Management expects 61% revenue growth for the full year 2026. This is significantly higher than the software industry average of 15%, which supports the “premium” valuation long-term investors are willing to pay.