Palantir (PLTR) was breaking records at the start of the week. Now its breakout has reversed, with the stock heading into a correction zone.
Shares fell about 7% on Friday, wiping out about $34 billion in market value.
The final figure to watch is $188.15. Below, Palantir would finish more than 10% below its October 9 closing record, confirming a correction, according to Yahoo Finance calculations.
It took almost a year to recover the old record. The victory lasted three trading sessions.
Palantir closed above its November 2025 intraday high near $208 last Friday, then rose to near $213 on Monday. On Wednesday, it was back under the old ceiling. Friday’s early move above $203 gave way to another pullback.
This is a bull trap – a break above resistance that reverses, leaving investors who were chasing the move to suffer losses.
The morning software rally suffers a similar fate.
In a Yahoo Finance basket of 45 software stocks, 43 are down and 15 are losing at least 5%. Cumulative losses in market value exceed $260 billion, including approximately $83 billion at Microsoft (MSFT).
ServiceNow (NOW) went from a gain of almost 4% to a loss of more than 5%. Salesforce (CRM) has given up an advance of more than 2% and is trading down about 3%. Twilio (TWLO) is down double digits, heading for its worst day since August 2025.
The iShares Expanded Tech-Software Sector ETF (IGV) loses nearly 5%, putting into play its worst day since April. Its gains from October and since the start of the year have disappeared.
This reversal comes just as investors are turning their attention back to software.
As Yahoo Finance’s Michael B. Kelley reported Monday, BofA double-downgraded Salesforce to Buy from Underperform, arguing that fears of AI supplanting its platforms were overblown.
“On the contrary, AI is expected to increase reliance on these platforms,” wrote analyst Tal Liani.
Cybersecurity Stocks Take Hard Hit
The First Trust Nasdaq Cybersecurity ETF (CIBR) is down about 10% this week, on track for its worst week since March 2020. Palo Alto Networks (PANW) and CrowdStrike (CRWD) are each losing about 18% for the week.
OpenAI’s talks to acquire security company Trail of Bits have reignited competition concerns. Yet Palo Alto and CrowdStrike are also partners in Anthropic’s new cybersecurity initiative, showing how AI companies can be collaborators as well as potential competitors.
For Palantir, rapid growth always comes with high expectations.
In its August earnings report, the company reported 93% revenue growth in the second quarter and reported $9.2 billion in cash, cash equivalents and short-term Treasury bills. Even after Friday’s sale, its market value is about 55 times the annual revenue forecast at the time. This leaves much of the growth built in.
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