Over the past month, the Nasdaq Composite has dropped 11%, with a 4% decline on March 10, its steepest single-day decline since September 2022.
The selloff started in late February. Some market players tied the market move to uncertainty about President Donald Trump’s tariffs and their potential effect on the economy.
But Dan Niles, founder and portfolio manager of Niles Investment Management, says the tech selloff is driven by revenue estimates, not tariffs, according to CNBC.
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“It’s not the tariffs knocking these tech stocks down. It is the fact that revenue estimates for six out of the seven biggest in the [Magnificent 7 tech stocks] all went down for Q1 after reporting Q4,” he said on CNBC.
Unlike many of its tech peers, Palantir’s financials remained resilient.
Palantir stock took off, then pulled back
Palantir (PLTR)  is known for providing AI-driven data-analytics software to the U.S. government and military as well as to commercial clients. The stock surged 340% in 2024, fueled by increasing demand for AI software.
In early February, Palantir posted fourth-quarter results that surpassed Wall Street expectations.
The company reported adjusted earnings of 14 cents a share for the quarter, beating the consensus estimate of 11 cents. Revenue came in at $828 million, up 36% year-over-year and exceeding the consensus of $776 million. Full-year revenue grew 29% to $2.87 billion.
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Palantir also provided stronger-than-expected guidance. For the full year 2025, it forecast sales between $3.74 billion and $3.76 billion, topping the average estimate of $3.52 billion.
“Our early insights surrounding the commoditization of large language models have evolved from theory to fact,” said Alex Karp, co-founder and chief executive of Palantir.
Following the earnings, Palantir stock hit a closing peak of $124.62 on Feb. 18. But in recent weeks, it has pulled back 30% to $86.24, impacted by Pentagon budget cuts, Karp’s stock-sale plan and the broad market correction.
Analyst lowers Palantir stock price target
Loop Capital analyst Mark Schappel recently lowered his price target on Palantir from $141 to $125 and reiterated a buy rating, according to thefly.com.
Loop continues to see Palantir as an early software leader in enterprise artificial intelligence, which is at a “tipping point” as small-scale pilot programs move into production and as AI use cases “grow exponentially across all industries,” the investment firm wrote.
Following a meeting with Palantir’s management, Loop Capital expressed increased confidence in its investment thesis. The company lowered the price target, however, as proposed federal-spending cuts and Palantir’s relatively high valuation amid broader market turmoil have weighed on the stock.
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Yahoo Finance estimates the stock’s forward price-to-earnings multiple at almost 158.
The Palantir dip has caught the attention of high-profile investors. On March 10 Cathie Wood’s Ark funds added 152,000 shares of the company.
Palantir’s $86.24 close on March represented an 8% gain. The stock is up 14% year-to-date.
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