Palantir (PLTR) was breaking records earlier this week. Now its breakout has reversed, with the stock heading toward correction territory.
Shares are falling roughly 7% Friday, erasing about $34 billion in market value.
The closing number to watch is $188.15. Below that, Palantir would finish more than 10% beneath its October 9 record close, confirming a correction, according to Yahoo Finance calculations.
It took nearly a year to reclaim the old record. The victory lasted three trading sessions.
Palantir closed above its November 2025 intraday high near $208 last Friday, then reached nearly $213 Monday. By Wednesday, it was back below the old ceiling. Friday’s early move above $203 has given way to another retreat.
That’s a bull trap — a breakout above resistance that reverses, leaving investors who chased the move nursing losses.
Software’s morning rally is suffering a similar fate.
In a Yahoo Finance basket of 45 software stocks, 43 are falling, and 15 are losing at least 5%. Combined market-value losses exceed $260 billion, including roughly $83 billion at Microsoft (MSFT).
ServiceNow (NOW) went from gaining nearly 4% to losing over 5%. Salesforce (CRM) surrendered an advance of over 2% and is trading roughly 3% lower. Twilio (TWLO) is falling double digits, heading for its worst day since August 2025.
The iShares Expanded Tech-Software Sector ETF (IGV) is losing nearly 5%, putting its worst day since April in play. Its October and year-to-date gains are gone.
The reversal comes just as investors were warming to software again.
As Yahoo Finance’s Michael B. Kelley reported Monday, BofA double-upgraded Salesforce to Buy from Underperform, arguing that fears of AI displacing its platforms were overdone.
“If anything, AI should deepen dependence on these platforms,” analyst Tal Liani wrote.
Cybersecurity stocks are taking a beating
The First Trust Nasdaq Cybersecurity ETF (CIBR) is down roughly 10% this week, on track for its worst week since March 2020. Palo Alto Networks (PANW) and CrowdStrike (CRWD) are each losing roughly 18% for the week.
Reported OpenAI talks to acquire security firm Trail of Bits have revived 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 still comes with towering expectations.
In its August earnings report, the company posted 93% second-quarter revenue growth and reported $9.2 billion in cash, cash equivalents, and short-term Treasurys. Even after Friday’s selling, its market value is roughly 55 times the annual revenue it projected at the time. That leaves plenty of growth priced in.