PLTR Stock Loses Over 12% In Three Days — Is The Defense Boost Over?

• Palantir and other defense stocks have given up much of their war-driven gains, as the initial rally fueled by the conflict begins to fade. 
• Palantir’s forward P/E is now the lowest in five months.
• Stocktwits sentiment for PLTR has declined since mid-March to ‘bearish’ on Monday.

Palantir Technologies, Inc. shares (PLTR) have slid sharply in recent sessions, tracking declines across several defense names that had earlier rallied on the back of the U.S.-Iran conflict, as a broader market selloff and rising concerns over the war’s economic fallout weigh on investor sentiment.

PLTR stock declined for three straight sessions, cumulatively losing 12.6%, to its lowest level since March 2. On Stocktwits, retail sentiment for the ticker slid since the second week of March and was ‘bearish’ on Monday.

Defense Stocks Lose Boost

Shares of key defense contractors such as missile maker RTX Corp (RTX), fighter jet supplier Lockheed Martin (LMT), and missile systems and advanced weapons company Northrop Grumman (NOC) also declined in recent days – a signal that the war-linked strength could be waning.

The benchmark S&P 500 has fallen roughly 4% over the past three sessions, with major tech stocks also coming under heavy pressure. AI bellwether Microsoft is now on track for its worst quarterly performance since the 2008 financial crisis.

Developments in the U.S.-Iran relationship have been major market drivers of late. On Monday, the Wall Street Journal reported that President Donald Trump told aides he was willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed — a scenario that could allow oil tankers to move freely through the narrow waterway and stabilize oil prices.

Retail’s View On PLTR

PLTR trended on Stocktwits late Monday, with traders perusing key signals – war updates, short interest and new business – to forecast where the stock goes from here.

“$PLTR what a ridiculous selloff. These guys are signing contracts left and right,” said a user.

A bearish user wrote: “The entire US market has been pumped to its zenith for 17 years. The valuations are too damn high. And PLTR is the most expensive S and P stock since the dot-com bust. Fair Value: $20.”

PLTR P/E Drops To 5-Month Low

To be sure, short interest in PLTR has risen to 2.2% from 1.9% at the end of February. Notably, the stock has also shed about 34% since “The Big Short” investor Michael Burry revealed he was short on it. 

Palantir’s 12-month forward price-to-earnings ratio has dropped sharply to 104x from a peak of 270.3x last November, although it's still quite high within the software group. 
 

The relative strength index (RSI) reading for Palantir was 38.67, per Koyfin. A figure below 30 signals that the stock is oversold.

Recent Catalysts For PLTR

The share weakness comes as Palantir has been expanding its business at a steady pace. On Monday, the company and automaker Stellantis announced that they had renewed their partnership for another five years. The automaker will increase its usage of Palantir's data management software and begin implementing its artificial intelligence platform in specific business units and regions

Palantir’s Maven AI system will become an official program of record, Deputy Secretary of Defense Steve ​Feinberg said in a letter to Pentagon leaders earlier this month, a move that locks in long-term use of Palantir’s weapons-targeting technology across ‌the U.S. military.

The company is also reportedly working on the main software that will run President Trump’s planned Golden Dome antimissile shield.

Year-to-date, Palantir shares are down 23%.

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