Palantir Rally Stalls as Treasury Yields Jump, Google Targets AI Security Market

Shares climbed more than 70% from this year’s low in two months

Valuation concerns intensify as stock falls below $170

Shares of AI bellwether Palantir Technologies tumbled as surging US Treasury yields and Google’s push into AI for government and cybersecurity fueled concern over the stock’s lofty 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 loss to about 9%. It had reached this year’s highest closing price of $186.38 on August 31 before slipping below $170 two days later.

Palantir rebounded after falling to this year’s lowest closing price of $107.27 in June. The stock jumped 29.45% in a single day after the company posted better-than-expected second-quarter results. It rose more than 51% in August alone. From its June low through the end of August, the shares gained more than 70% in just over two months.

The selloff came as US Treasury yields climbed sharply. In the bond market on September 2, the yield on the 10-year Treasury rose 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. Rising yields reduce the present value of future earnings, increasing pressure on richly valued growth stocks.

Google’s move into AI for government and cybersecurity also added to the pressure. The company recently unveiled Gemini 3.8 Flash Cyber and plans to offer it first to government agencies and operators of critical infrastructure. That has raised concerns that Google could encroach on Palantir’s business, where government agencies are core customers.

Some investors say the stock’s high valuation could make it vulnerable to even minor negative developments. Palantir is trading at about 82 times forward earnings.

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