Palantir Falls Below $170 as Treasury Yields Surge, Google Targets Government AI

Up More Than 70% From June Low in Two Months

Valuation Concerns Mount as Shares Slip Below $170

Palantir Technologies shares lost momentum sharply as surging U.S. Treasury yields and Google’s push into AI for government and cybersecurity clients added to concerns over the company’s rich valuation.

On September 2, Palantir closed at $169.46, down 5.81% from the previous session. The stock had already fallen 3.47% a day earlier, bringing its two-day decline to about 9%. It posted this year’s highest closing price of $186.38 on August 31, then fell below $170 two days later.

Palantir rebounded after closing at a year-low $107.27 in June. The stock surged 29.45% in a single day after the company posted blowout second-quarter earnings. It gained more than 51% in August alone, leaving the shares up more than 70% from the June low to the end of August in a little over two months.

A sharp rise in U.S. Treasury yields helped halt the rally. In the bond market on September 2, the benchmark 10-year Treasury yield climbed as high as 4.821% intraday, the highest level in two years and 10 months. It later eased to the 4.79% range, but remained elevated. Higher yields reduce the present value of future earnings, putting more pressure on richly valued growth stocks.

Google’s expansion into AI for government agencies and cybersecurity also weighed on sentiment. The company recently unveiled Gemini 3.8 Flash Cyber and said it would offer the product first to government agencies and operators of critical infrastructure. That fueled concerns about overlap with Palantir, whose core customers include government institutions.

Some investors say the stock could swing sharply even on minor negative developments because of its lofty valuation. Palantir is trading at about 82 times forward earnings.

Park Ju-yeon, Hankyung.com reporter grumpy_cat@hankyung.com