Stephen Guilfoyle, a 30-year Wall Street veteran who now runs Sarge986 LLC, a family trading operation, attributed Palantir’s recent decline to profit-taking by short-term traders. He noted that the “swing crowd” likely locked in gains as the stock tested a key moving average, accelerating the sell-off.

Palantir's price-to-sales ratio of 114 is way above OpenAI's 17. Palantir's success in defense work could block access to growth as enterprise AI payoff remains elusive

The sudden reversal shows how the hottest AI trade and top-performing stock of the year is colliding with a broader market rotation out of Big Tech.