New York, Feb 24, 2026, 16:21 ET — After-hours
- Palantir shares slipped, caught up in the wider selloff hitting software stocks.
- Another burst of AI news had traders zeroing in on potential disruption across the enterprise software space.
- Next up: major AI earnings reports hit midweek, with U.S. inflation figures landing Friday.
Palantir Technologies Inc. dropped 3.4% to $128.75 during Tuesday’s session, cutting the data-analytics company’s market cap to around $433 billion. The stock’s valuation? About 395 times trailing earnings.
This shift lands squarely at a moment when investors are revaluing software stocks, gauging just how fast AI-driven automation might upend the work tied to subscription models. Price moves have been abrupt—hardly limited to a single patch of the tech landscape.
Palantir’s right in the thick of it. The company offers software designed for customers looking to leverage data and put AI to work in regular business tasks. Still, when markets get wary of software being the next supply chain “disruption,” the stock feels it.
Selling pressure spread across tech names. The iShares Expanded Tech-Software Sector ETF dropped 4.7%. Snowflake tumbled 8.6%, Datadog was off 11.3%, CrowdStrike gave up 9.9%. SPY, which tracks the S&P 500, edged down 1.0%, and the Invesco QQQ ETF shed 1.2%.
A viral “what-if” scenario from Citrini Research has been fueling the latest swings, sketching out a 2028 downturn where unemployment spikes to 10.2% due to AI pushing into software roles. “Software stocks and the IGV particularly are just massively oversold,” Dennis Dick, chief market strategist at Stock Trader Network, told Reuters. Reuters
Anthropic stirred things up Tuesday, rolling out a set of new “plug-ins” meant to tie its Claude model directly into business operations. The company developed these add-ons with partners like LSEG, FactSet, Salesforce’s Slack, and DocuSign, according to Reuters.
Robert Pavlik, senior portfolio manager at Dakota Wealth, thinks it’s “still early in the process” with these tools, cautioning that “you definitely need human intervention” when firms attempt to scale up. Over at SlateStone Wealth, chief market strategist Ken Polcari says fatigue is creeping in, though some beaten-down names now “look like opportunities.” Reuters
Sector moves are reflecting the jitters. U.S. software shares have dropped 24% year-to-date, with investors shifting cash into the AI supply chain and away from firms thought vulnerable to automation. Wednesday brings Nvidia’s earnings, a key checkpoint for the current AI-focused strategy. Ed Yardeni at Yardeni Research still argues that AI is more likely to drive productivity gains than mass job losses.
Palantir’s growth narrative is chugging along in the background. Earlier this month, the company put out a revenue forecast for 2026—$7.182 billion to $7.198 billion—right after it posted quarterly results that beat Wall Street’s estimates.
The flipside is pretty clear: that lofty multiple can backfire quickly if customers pull back on spending, deals stall out, or investors start to think “AI disruption” spells weaker pricing power for software everywhere. With Palantir, it all boils down to mood—shares can move on vibes long before fundamentals catch up.
On Wednesday, attention turns to whether the selloff in software stocks has run its course. Traders are also eyeing the upcoming U.S. producer price numbers, out Friday, Feb. 27 — data that could sway rate bets, given its role as a key wholesale inflation indicator.
