Palantir falls 10% to $155.28 as AI stock selloff widens

Key Facts

Palantir shares fell 10% to $155.28 in afternoon trading on November 5, according to 24/7 Wall St. The decline came amid a selloff in stocks tied to artificial intelligence, as enthusiasm waned for companies that had benefited from the trend. The report said CrowdStrike shares fell 9% to $218.24, while Okta shares declined 10% to $172.04. Reuters linked part of the selloff to investors reassessing the implications of Democrats’ midterm election victory for plans to build AI data centers. Pressure spread to U.S. market indexes, in a session that reflected a broader repricing beyond a limited group of technology stocks.

Major U.S. stock indexes fell in the same session: the Nasdaq Composite lost 5.5%, the S&P 500 fell 4.4% and the Dow Jones declined 3.4%, according to Reuters. The agency said the Nasdaq fell more than 10% from its record close, putting it on track to confirm it had entered correction territory. The index had set a record close of 27,599.89 points on October 6, before October losses erased more than $2.5 trillion from its market value. The semiconductor index also fell as much as 11% on November 5, its worst performance since March 2020. The selloff thus encompassed AI-related stocks as well as broader parts of the technology sector and market.

Reuters attributed some of the concern to investors’ questions about how quickly heavy spending on AI infrastructure would translate into profits, while high borrowing costs continued to weigh on financing appetite. Major technology companies are turning to debt markets to finance planned investments worth billions of dollars in data centers, chips and the infrastructure needed to develop AI. Alphabet and Meta’s results the previous month did not dispel investor concerns about returns on that spending, the agency said. The Associated Press said concerns extended to the possibility that data center construction could slow because of borrowing costs and elevated AI stock valuations. It added that the election results increased the likelihood of restrictions on construction, while Reuters pointed to ballot initiatives approved in U.S. elections that could limit building in the coming months and years.

Reuters reported that investors reassessed what the midterm election results could mean for data center construction, as unified control of Congress shifted between the parties, potentially bringing policy changes. It quoted Samir Samana, an analyst at Wells Fargo, as saying the shift could bring “a great deal of uncertainty, disruption and abrupt policy change.” At the same time, some participants in data center construction had less access to financing as stock and bond markets fell, according to Reuters. The agency quoted Adam Sarhan, chief executive of 50 Park Investments, as saying investors were now asking whether customers would keep paying for AI products and services. “The momentum around AI has been enormous, but the market is now asking whether customers will keep paying for these products and services. There does not appear to be a clear answer at this point,” he added.

Palantir’s decline followed the company’s announcement of strong third-quarter results on November 2, with revenue of $2.313 billion, up 96% year over year and 20% quarter over quarter. It was the first time its quarterly revenue topped $2 billion. U.S. commercial revenue rose to $984 million, up 148% year over year and 29% quarter over quarter, surpassing U.S. government revenue of $953 million for the first time. U.S. government revenue itself grew 96% year over year and 18% quarter over quarter, according to the company’s filing with the U.S. Securities and Exchange Commission. Despite the strength of those figures, Axios noted that the backlog remained largely unchanged quarter over quarter, as investors scrutinize results from companies across the AI ecosystem more closely.

Palantir raised its 2026 revenue forecast to a range of $8.530 billion to $8.534 billion and projected fourth-quarter revenue of $2.649 billion to $2.653 billion, according to its filing. That elevated guidance comes as questions broaden about the ability to sustain growth as the revenue base expands. Axios quoted Brent Thill, an analyst at Jefferies, as saying the discussion was shifting to “the ability to keep accelerating growth on a larger base,” rather than whether underlying demand was strong. The agency added that Palantir shares had risen about 2,000% in the four years before its report and that its forward price-to-sales multiple exceeded 90 times in November 2025. In the broader market, the U.S. October jobs report was the next economic catalyst; the Bureau of Labor Statistics scheduled its release for November 6, 2026, at 8:30 a.m. Eastern time.