Palantir Stock drops in the second half of 2025. The reason why is clear.

• Palantir acts in a historically high rating and there is now no other software shares even close.

• Remarkable institutional investors such as Cathie Wood and Stanley Druckmiller have recently sold Palantir shares.

• While shares remain increased, wider trends from institutional investors suggest that there has been a considerable delay in buying activities around Palantir shares.

• 10 shares that we like than Palantir Technologies ›

Data Mining Specialist Palantir Technologies (Nasdaq: PLTR) Palantir Stock was the best performer in the Palantir shares in the Palantir. Last year. Last year Palantir was stock S&P 500 index, as well as the third best stock in the Nasdaq-100. So far in 2025 things have not changed much for the software player of Artificial Intelligence (AI)-as shares are rooted by a striking 74% from this letter (10 June).

Although the momentum does not seem to be slowing down for Palantir at all, my prediction is that the stock will fall in the second half of the year.

At the moment, let’s explore some trends that feed Palantir shares, as well as some interesting breadcrumbs that can support my idea that shares are on their way to a sale.

Do you have to dump your Palantir position now? Read on to find out.

There is a lot that can be collected from the graph below. The obvious collection meals is that Palantir’s price-to-sales (p/s) multiple of 105 is considerably higher than all software growth shares in this peer set. However, the bigger idea from the analysis below is that the valuation of Palantir continues to expand.

This dynamic implies that investors buy Palantir shares in large numbers. The deeper question I asked is: Who are the investors who continue to chase the momentum of Palantir?

Based on some recent indications, I think I might have an answer.

Ark Invest CEO Cathie Wood is one of the original Palantir Bulls on Wall Street. Shortly after the IPO of the company at the end of 2020, Wood regularly appeared on financial news programs – constantly talking about its excitement around Palantir and the ability of the company to disrupt Legacy software providers. Although this was a great source of indirect PR for Palantir, Wood shocked the investment world when she dumped her interest somewhere in 2022.

After these movements, Wood started collecting a position in Palantir shares in 2023. According to the graph in the previous section, the position of Ark Invest in Palantir is on a healthy profit, taking into account shares that are now waving around the highest tones. Wood has taken note of these trends and the famous Tech investor again reduces its exposure to Palantir.

However, Wood is not the only remarkable personality on Wall Street who chooses to take a profit in Palantir. Billionaire investor Stanley Druckmiller of the Family Office of Duquesne fully left Palantir during the first quarter, according to the most recent 13F application from the fund. Just like Wood, Druckmiller has also been in and out of Palantir shares in recent years.

I see the decision to reduce exposure to Palantir shares as a cautious one. Although the sale of Hout and Druckmiller does not necessarily imply a bearish look at Palantir at all, I think that cropping exposure and taking a profit in a share that seems overbough is logical.

The appreciation of Palantir is historically high, even compared to what investors have seen during the peak bubble days of the Dot-Com beak. I think that an increasing number of institutions will come that the current valuation process of Palantir is not sustainable, since the stock has already been carried out.

The graph above illustrates the number of shares of Palantir shares that has increased and purchased by institutional investors in the past year.

As the trends indicate, there had been an institutional buying of Palantir shares in the last months of 2024. Tegelijkertijd is de oranje lijn – die institutionele verkoop aangeeft – ook gestaag geklommen in de late 2024 en uiteindelijk gekocht met de palantiretische instellingen zijn in de loop van de instellingen gekocht, wat voorstander is van de aandelen van de aandelen, die instellingen zijn voor de tijd, wat voorstanders zijn, die instellingen zijn, zijn instellingen voor de tijd gekocht dan aandelen die zijn goedgekochte instellingen zijn voor de tijd die grote investers zijn, die Institutions that have been purchased over time have been purchased from the shares that have been purchased in time are shares that have been purchased in time, which are institutions for time, the net of the shares of the time is obvious. being.

During this year, both purchase and sales activity were delayed – as indicated by the relative flattening of both lines. These trends suggest that although settings remain carefully optimistic about Palantir, it could be sold on the horizon as the narrow gap between buyers and sellers becomes clearer.

As such, I think that the current momentum that Palantir shares works can seduce more institutions to dump their shares-which leads to a falling share price and the much-needed valuation normalization.

In the end I don’t think dumping your position in Palantir is completely needed. As a long -term investor it is important to hold your winners of the best conviction. However, I think taking some profit from the table can be a smart decision at the moment.

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Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions and recommends Cloudflare, Crowdstrike, DataDog, Mongodb, Palantir Technologies, ServiceNow and Snowflake. The Motley Fool has a disclosure policy.

Prediction: Palantir supply drops in the second half of 2025. The reason why is clear. was originally published by the Motley Fool