Palantir has officially entered correction territory after falling over 10% from Monday’s all-time high, dragging major tech names down with it. The drop comes as investors start backing away from stocks they believe were priced too high, too fast. The Dow Jones collapsed 398.70 points on Thursday, closing at 46,912.30, while the S&P 500 dropped 1.12% to 6,720.32 and the Nasdaq Composite sank 1.9% to 23,053.99. This wasn’t just a blip. The Nasdaq 100 is now down over 2% since last Friday and is tracking for its worst week since early April. The biggest hits came from Palantir , Nvidia, Microsoft, AMD, and Broadcom, all of them crushed by a brutal market wake-up call. Investors are finally seeing what’s been clear for a while: a cool product and a catchy ticker don’t mean the stock isn’t overpriced as hell. Tech cracks under sky-high valuations The selloff wasn’t random. People are finally running from sky-high AI stock valuations that just don’t make sense anymore. Palantir’s price-to-earnings ratio is 600. For the math people in the room, that means Palantir needs to increase its earnings 10x to even begin looking slightly rational. And even then, it’d still trade at a multiple almost double that of Alphabet. JPMorgan market analysts said , “It’s hard to look at Palantir’s current valuation and see it as anything but stretched; very, stretched, in fact. A great company can be a bad investment.” In plain English: even if Palantir nails everything, the stock is still overpriced. “I would avoid Palantir stock,” they added. Other AI-linked names also tanked. AMD dropped 7%, wiping out Wednesday’s gains. Oracle fell 3%. Qualcomm slipped 4%, despite beating earnings. Meta and Nvidia (usually market favorites) both slid too. Mike Mussio, head of FBB Capital Partners, said the market was reacting hard to weak outlooks. “That’s the difference between some of these companies on earnings being up double digits versus being down double digits,” he said. “There’s not a lot of in-between.” Stagwell jumps on Palantir partnership while layoffs soar In a twist, Stagwell Inc. skyrocketed Thursday, jumping as much as 85% pre-market and closing up 42%, thanks to a new AI partnership with Palantir. The two companies are launching a platform to cut down on human agents in ad campaigns. According to a joint statement, Stagwell’s Assembly media company is already bringing clients onboard. CEO Mark Penn said the goal is to do more with fewer people. “An ad campaign could be done by a minimal number of people,” Penn said. Right now, campaigns need 50 to 100 people, but with this platform, they’re aiming to slash that dramatically. He added, “We are definitely gonna see revenue in 2026.” Stagwell also beat Q3 estimates, racking up $472 million in net new business over the last year, compared to $345 million the year before. The partnership may be good news for Stagwell, but for Palantir, the gains didn’t stick. Adding more pressure to the market, layoff numbers for October hit 153,000, the highest for the month in 22 years, and up 175% year-over-year. That’s nearly three times higher than September. The numbers come from Challenger, Gray & Christmas, who say this is shaping up to be the worst layoff year since 2009. On top of that, there’s still no new economic data coming in because of the U.S. government shutdown, which has now lasted over a month — the longest in U.S. history. That means investors are flying blind while the economy throws up red flags. Join Bybit now and claim a $50 bonus in minutes
