Shares of Palantir Technologies Inc ( PLTR ) continue to face selling pressure following an AI-powered rally in recent months. Here’s a look at what’s going on.

What Happened: Palantir ( PLTR ) stock hit all-time highs in early August following a strong second-quarter earnings report. The company beat estimates on the top and bottom lines, reporting revenue of $1.004 billion versus estimates of $939.71 million, and adjusted earnings per share of 16 cents versus estimates of 14 cents.

The rally in Palantir ( PLTR ) shares reversed course earlier this month after Citron's Andrew Left said the stock had become "beyond overvalued." Citron announced a short position against Palantir ( PLTR ) and argued in a research report that the stock should be trading at $40 per share.

“At $40, PLTR would still be expensive,” Citron said in the report.

Benzinga Edge rankings show moderate fundamentals, with Value ranking 2.76/100, Growth ranking 95.17/100 and Momentum ranking 98.49/100. Overall, the strong Growth and Momentum rankings indicate potential for future performance, despite the low Value ranking.

The stock shows a bearish trend, with resistance at $156.39 and support at $149.37. The recent high of $156.39 failed to hold, indicating a potential reversal as it approaches the support level. Analysts have highlighted Palantir’s valuation edge, noting its 2025 Price/Earnings-to-Growth (PEG) ratio stands at 1.6x, which is favorable compared to Salesforce’s 1.5x, suggesting it may be undervalued despite concerns about high P/E ratios. Palantir ( PLTR ) trades with a forward P/E of approximately 250, according to Benzinga Pro.

MACD lines are converging, with the MACD at -1.25 and the signal line at -1.30, indicating a potential shift in momentum if the lines cross. This could lead to a bullish divergence if the price holds above support. The market structure shows lower highs and lower lows, confirming a downtrend. The recent price action forms a descending triangle, with the base at $149.37, suggesting a potential breakdown if it fails to hold that level.

PLTR Price Action: Palantir ( PLTR ) shares were down 1.61% at $156.23 at the time of publication on Monday, according to Benzinga Pro. 

Read Next:

Opendoor (OPEN) Stock Surges On Rate Cut Hopes: What’s Going On?

Suze Orman Bets On This ‘Controversial’ Tech Stock—Explains How Her Biggest Investment Blunder Cost Her ‘Extraordinary’ Gains