While it's well off its recent highs, Palantir Technologies (NASDAQ: PLTR) was one of the best-performing stocks in 2024 and early 2025. However, those gains have led to an extreme valuation, with the stock trading at a forward price-to-sales (P/S) multiple of 52 times 2025 analyst revenue estimates.

Is the party finally over for the shares of Palantir Technologies (NASDAQ: PLTR)? Hence, the question for investors is whether the 32% decline is a natural pullback after a rapid increase, or is it just the beginning of a longer-term decline to come.

Which AI stock is the better buy? Compare growth potential, financials, and market positions to decide which tech giant fits your portfolio.

Nvidia (NASDAQ: NVDA) and Palantir Technologies (NASDAQ: PLTR) delivered terrific gains last year as shares of both companies shot up remarkably thanks to the fast-growing demand for their artificial intelligence (AI)-focused hardware and software solutions.

Palantir (PLTR) is down significantly from its peak price, and most bulls have started toning down their excitement about the stock. PLTR was trading above $125 and at well over 600 times earnings. Bulls expected even more,