Palantir Drops 8% as AI Trade Cools, Sinking Futures
Stock futures are under pressure Tuesday, led lower by a reversal in AI stocks that have powered much of this year’s rally. S&P 500 futures are down 1.1%, Nasdaq 100 off 1.5%, and Dow futures lower by 273 points. The pullback is headlined by an 8% slide in Palantir, despite a strong earnings report — a sign that valuation anxiety is finally catching up with the AI trade.
Palantir Tanks Despite Strong Guidance — Has the AI Trade Topped Out?
Palantir beat Wall Street’s Q3 estimates and guided above consensus for Q4, but it wasn’t enough. Shares are down 8% premarket. Revenue surged 63% year over year, and the company sees $1.33 billion next quarter, well ahead of the $1.19 billion forecast. But with a P/E nearing 700 and the stock up 173% YTD, traders were looking for more — especially longer-term clarity. Deutsche Bank flagged the lack of 2026 visibility as a red flag.
Other AI names are feeling the heat. Oracle is down 3%, while AMD, Nvidia, and Amazon are each off roughly 2%. These are heavily owned names with forward multiples to match — and right now, the market isn’t giving out free passes.
Uber, Norwegian Cruise, Upwork Move Big on Earnings
Uber slid 5% after guiding Q4 EBITDA slightly below expectations, even as Q3 revenue came in above the Street at $13.47 billion. Confusion over EPS versus consensus didn’t help sentiment.
Cruise lines are getting slammed. Norwegian Cruise is down more than 10% after missing on revenue. In sympathy, Royal Caribbean and Carnival each slipped around 4%.
NASDAQ 100 Price Forecast
Every new NASDAQ 100 analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all NASDAQ 100 forecastsOne standout: Upwork surged 20% premarket after crushing Q3 expectations with 36 cents EPS vs. 29 expected. Revenue also topped at $201.7 million.
Other Movers: Sarepta, Spotify, Yum, Victoria’s Secret
Sarepta Therapeutics cratered 35% after a late-stage study on Duchenne treatments missed its main goal — a major setback.
Spotify rose nearly 5% after revenue of €4.27 billion beat. Yum Brands added 2% on strong Taco Bell demand and a potential Pizza Hut shake-up.
Victoria’s Secret fell 4% following activist pressure from BBRC International calling for board changes.
What Are Traders Watching Now?
The broader concern is whether this is a pause in the AI run — or the start of something bigger. The S&P’s forward P/E is now above 23, just shy of dot-com levels. And with big voices like Goldman’s Solomon and Morgan Stanley’s Pick warning of 10–20% drawdowns, there’s a shift in tone.
Breadth remains poor — more than 300 S&P 500 stocks closed red Monday. And if AI leadership continues to falter, traders may start to unwind some of the most crowded positions on the tape.
Keep an eye on incoming economic data, particularly jobless claims and services PMI. The Fed’s December decision is still in play — and for richly valued names, that’s the next big catalyst.
More Information in our Economic Calendar.
