Palantir Stock is Plunging Ahead of the Bell. Here’s the Chart Level to Watch.

After a lights-out performance in 2024, Palantir (PLTR) stock has come under heavy pressure in 2025, including a 6% drop in today’s pre-market session. PLTR is getting hammered lower by mounting concerns over potential government spending cuts, as well as broader market uncertainty regarding tariffs and their impact on the economy.

Along with potential Department of Defense budget reductions that could impact Palantir's significant government revenue exposure, the company's aggressive stock-based compensation, standing at 24% of revenue, presents a dilution risk for shareholders. The company's valuation metrics also remain a point of contention, as PLTR trades at 153.76 times forward adjusted earnings and maintains a price-to-sales ratio of 53.37, significantly higher than other artificial intelligence (AI) industry leaders.

What Could Stop the Bleeding in PLTR Stock?

Palantir’s March 24 addition to the S&P 100 Index ($OEX) is expected to generate sustained institutional buying pressure, potentially establishing a new price floor for the struggling shares. And despite valuation concerns, Palantir continues to demonstrate strong fundamental growth, with revenues increasing 29% to $2.8 billion in 2024, driven by an impressive 43% year-over-year increase in its commercial client base. The company's AI Platform (AIP) has been gaining substantial traction, positioning Palantir favorably in a market that IDC projects will reach $153 billion by 2028. 

Recent organizational changes, including a dramatic IT headcount reduction from over 200 to under 80 employees, reflect CIO Jim Siders' push toward a decentralized technology model, and strategic partnerships with Archer Aviation (ACHR) and Anduril highlight Palantir's expanding role in modernizing defense technology, particularly in combining aerial mobility, autonomous systems, and AI-enabled insights.

What’s the Long-Term Outlook for PLTR?

While near-term headwinds and valuation concerns continue to impact stock performance, Palantir's strategic position in AI software applications and expanding commercial opportunities suggest the potential for sustained long-term growth. 

High-profile brokerage firm Goldman Sachs currently maintains a “Neutral” rating with an $80 price target, which indicates PLTR could already be fairly valued around current levels. However, analyst price targets show significant dispersion, ranging from $18 to $125.

Key Chart Levels to Watch for PLTR Now

PLTR is set to open today’s trading resting heavily on round-number support around $80. The stock could have further to fall, as the Bollinger Bands and 14-Day Relative Strength Index (RSI) suggest that volatile Palantir shares aren’t quite oversold just yet.

Back in mid-January, a break below the lower Bollinger Band preceded a sharp run higher in PLTR over the next month, so short-term traders will want to keep an eye on this level in the days ahead to see if the selling in PLTR gets overdone.