What Happened?

A number of stocks fell in the afternoon session after concerns grew over lofty valuations and the uncertain profitability of artificial intelligence investments. 

The sell-off, which dragged Wall Street toward a fourth consecutive day of losses, was fueled by investor apprehension about whether the high prices of AI stocks were justified. Questions mounted about how quickly the massive investments in AI will translate into substantial profits. 

A recent UBS survey highlighted these concerns, finding that only 17% of large businesses were using AI projects at scale. This data hinted that expected revenue growth from AI products might be more subdued than previously anticipated, prompting a broad reevaluation of the sector. 

Adding to the concern, reports revealed that a critical $10 billion funding deal between cloud giant Oracle and Blue Owl Capital for a Michigan data center stalled. While Oracle disputed the narrative, claiming they selected a different equity partner, the reported reason for Blue Owl's exit sparked widespread anxiety: concerns over Oracle's ballooning debt and "unfavorable" terms. 

As a result, investors grew increasingly concerned that hyperscalers were relying more on risky private equity structures to build infrastructure rather than using their own capital.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Marketing Software company Upland Software (NASDAQ: UPLD) fell 2.6%. Is now the time to buy Upland Software? Access our full analysis report here, it’s free for active Edge members.
• Data Analytics company Palantir Technologies (NASDAQ: PLTR) fell 4.9%. Is now the time to buy Palantir Technologies? Access our full analysis report here, it’s free for active Edge members.
• Advertising Software company Zeta Global (NYSE: ZETA) fell 4.1%. Is now the time to buy Zeta Global? Access our full analysis report here, it’s free for active Edge members.
• Vulnerability Management company Qualys (NASDAQ: QLYS) fell 2%. Is now the time to buy Qualys? Access our full analysis report here, it’s free for active Edge members.
• Data Infrastructure company C3.ai (NYSE: AI) fell 2.8%. Is now the time to buy C3.ai? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Palantir Technologies (PLTR)

Palantir Technologies’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 15 days ago when the stock gained 4.3% on the news that Wedbush analyst Dan Ives expressed strong confidence in the company's long-term value, suggesting investors should "triple down" on the stock. 

Ives stated he saw a potential "$1 trillion market cap" for Palantir over the next two to three years due to its unique position in the enterprise AI landscape. This positive commentary came after the stock had a difficult previous month, falling about 20% amid investor concerns over high valuations in the AI sector. The analyst's confidence appeared rooted in the company's strong performance, as Palantir's third-quarter revenue had increased by 63% year-over-year. This growth was driven by a 121% surge in U.S. commercial revenue, fueled by its Artificial Intelligence Platform (AIP). Following the strong results, the company also raised its revenue outlook for the fourth quarter and the full year.

Palantir Technologies is up 137% since the beginning of the year, but at $178.09 per share, it is still trading 14% below its 52-week high of $207.18 from November 2025. Investors who bought $1,000 worth of Palantir Technologies’s shares 5 years ago would now be looking at an investment worth $6,540.

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