What happened
Palantir (NYSE:PLTR) stock sank 24.7% last month, according to data provided by S&P Global Market Intelligence. While there wasn't any negative company-specific news pushing the data specialist's share price down, negative momentum for the broader market and a shifting approach to growth-dependent stocks were enough to trigger big sell-offs.
With catalysts including high inflation, rising Treasury bond yields, and expectations that the Federal Reserve will implement significant rate hikes this year, the S&P 500 index fell 5.3% and the Nasdaq Composite fell 9%. Both indexes entered into correction territory in the month, which means they were down at least 10% from their respective peaks. Palantir's plunge last month followed a roughly 12% sell-off for the stock in December.
So what
Palantir did announce that it was expanding its business in South Korea and debuted a new certification program for users of its Foundry software platform last month, but these developments appear to have had very little impact on the company's stock performance.
Palantir now trades down roughly 72% from the high it hit in January 2021. Appetite for growth-dependent technology stocks seems to have peaked around that point, and the company's shares have struggled amid shifting market dynamics.
Now what
Palantir stock has continued to slide early in February's trading. The company's share price is down roughly 8.9% in the month so far, and it's likely that Meta Platforms' shocking fourth-quarter results and guidance was a major catalyst in the pullback.
Meta published Q4 results on Feb. 2 that arrived with worse-than-expected earnings and soft guidance that shook the market. The company's market capitalization plunged roughly $232 billion in the next day of trading, and the earnings release prompted sell-offs across the market. Amazon published better-than-expected Q4 results the following day and helped ease market anxieties, but lumpy performance this earnings season has been playing a significant role in market volatility.
Palantir is set to release its own fourth-quarter results before the market opens on Feb. 17, and the release is likely to be a big one for investors. With its last update, Palantir guided for sales growth of roughly 30% year over year in Q4, $418 million in revenue, and a non-GAAP (adjusted) operating margin of 22%. For the full year, the company expects sales to increase 40% year over year to reach $1.53 billion, and it also anticipates adjusted free cash flow of more than $400 million.
Those targets underwhelmed the market when initially released, but Palantir shares have become much cheaper since then. The company has an opportunity to start changing sentiment surrounding the stock with its upcoming report, and the results could have a ripple effect on other software industry players.
